Risk Aversion

July 31st, 2008 9:34 pm | by John Jansen |

Carlyle Group is shuttering its Blue Wave Hedge Fund because they could not raise enough assets to make the enterprise worthwhile. (Worthwhile means generating fat fees for the operators of the hedge fund.) The hedge fund opened its doors around the time the credit crunch gripped the market last year and the equity portion of the fund has a small gain thus far this year.

The statement announcing the liquidation noted the challenging environment of the past year. I think it is instructive of the now rampant predeliction to avoid risk. There has been a revolutionary shift in the appetite for risk and this is another example of that.

Every revolution ends in excess and it looks as if this one will ,too. Losses have been monumental and it will take time for the risking taking appetite to emerge again.

Be Sociable, Share!
  1. One Response to “Risk Aversion”

  2. By Marco Loureiro on Jul 31, 2008 | Reply

    The demise of hedge funds is only in its infancy…there’s more to come.

Post a Comment