Hedge funds ratcheting down risk?

Hedge funds are still thriving overall, but the game has changed, we've noted. Which raises the question: Are funds getting more conservative in the face of heightened risks? The New York Post suggests that more funds are moving into cash, reducing leverage and sitting on gains. Harbinger Capital, which posted returns of 14 percent as of the end of August, and Highbridge Capital, which had a 12 percent return in its Highbridge Statistical Opportunities Fund, are mentioned as examples. This is not the behavior we expect of hedge funds, which are supposed to thrive on risk and make money in up and down markets. But this may reflect the rising power of investors. They're more aggressive about dictating their needs these days. They may be agitating for a lower risk profile. These are extraordinary times after all.

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- here's the article

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