In these troubled times for even the big-names, we are hearing a lot of skepticism about the future of hedge funds. Perhaps the most dire predictions comes from Jeremy Grantham, chairman of Grantham, May, Van Otterloo & Co. He says that half of all hedge funds will bite the dust over the next five years, mostly because of the on-going credit crisis. That seems a bit overblown, but we may indeed see a lot of hedge funds go down. They will be readily replaced by new managers, some of whom may have previously managed a fund destined for doom. The reason for this is a matter of supply-demand. The demand is there. As an example, I offer the news that Iowa Public Employees Retirement System has issued a request (sub. req.) for proposal for one or more fund of hedge funds manager(s). The pensions remain hungry for alternative investments, despite the current turmoil--they really have little choice. Most need such investments to gain adequate diversification. The future is golden. If we could only predict the winners.