Do Hedge Funds Have a Future?

Abstract

On the question of whether “hedge funds have a future,” the author shows that the answer depends primarily on whether the message gets through to regulators and policymakers. If new regulations strip hedge funds of their comparative advantages and make them more like mutual funds, their future will not be secure. In the long run, of course, hedge funds will also have to provide the kind of attractive returns they have in the past if they are to have a future at all. This will be especially important because the returns on traditional asset classes are not as good as they have been in recent years.