Sunday, December 30, 2007

Hedge Funds: Recession in 2008

Hedge Funds Anticipate Recession In 2008: Rothstein Kass-Sponsored 'Flash Survey'
Over 61% Of Respondents Believe Recession 'Very Likely'

By PRNewswire | 30 December 2007

NEW YORK, and ROSELAND, N.J., Sept. 26 /PRNewswire/— The U.S. economy is heading for a recession in 2008, according to a poll conducted on behalf of CPA firm Rothstein Kass by Russ Prince, a leading authority on private wealth. Over 61% of hedge fund industry principals surveyed indicated that a recession in 2008 is a "very likely" scenario. Hedge fund industry principals also anticipate continuing market volatility through the remainder of 2007. Approximately 87% of those interviewed predicted that market volatility will increase or continue in the rest of the year.

"As trusted advisors to the hedge fund community, Rothstein Kass is constantly seeking insight into the economic trends impacting the industry. By combining the firm's unique expertise with our research capabilities, our Flash Surveys offer a snapshot view of how the industry is adapting to a rapidly changing business environment," said Russ Prince. "In light of increasingly widespread predictions of a recession, we decided to again speak directly with senior hedge fund principals to determine whether they feel a recession is imminent."

Mr. Prince surveyed over 239 hedge fund principals for this survey. Hedge funds polled had a minimum of $100 million in assets under management, and at least a five year track record, including some Rothstein Kass clients. Also among notable findings, only approximately 17% thought a recession would negatively impact their funds, while nearly 67% suggested that a recession would provide investment opportunities.

"An important part of hedge funds' appeal is their ability to outperform in turbulent or recessionary market conditions. It makes perfect sense that principals would be focused on the opportunities that current market conditions provide. In fact, over 81% of principals said that market volatility favors hedge funds over traditional investment vehicles." said Howard Altman, Co-Managing Principal of Rothstein Kass. "Respondents also seem undaunted by the prospects of a recession in 2008. While over 43% will likely change their fund's particular investments, fewer than 15% anticipated changes to the fund's underlying investment strategy."



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