Hedge funds had another rocky year in 2011, down 6.4%, as measured by the Dow Jones Credit Suisse All Hedge Index. And yet industry assets under management have climbed back to $2 trillion, having reached $2.1 trillion in 2007 before plummeting in the 2008 market crash. After reading Simon Lack’s just-published The Hedge Fund Mirage (John Wiley & Sons), one wonders why the assets continue to flow in. Here’s how the book begins: “If all the money that’s ever been invested in hedge funds had been put in treasury bills instead, the results would have been twice as good.”
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