A few months ago, people were willing to acknowledge the pain in the hedge fund world, but they clung to the notion that demand from institutions was still strong, even in the face of a credit crunch. But as the crunch deepened into a world crisis, that seemed like a harder position to hold. IDD notes that inflows into hedge funds have dropped to a mere $28 billion globally in the first half of this year, compared with $117 billion in the same period last year (Hedge Fund Research). We're starting to see more reports of big pensions, perhaps under pressure, taking a closer look at their alternative investments. It remains to be seen if this leads to a real trend away from hedge funds. If so, it would leave pensions right back in the quandary they were trying to remedy: how to fund get the extra bang they need to meet expected payments someday. Will we see more of a liability-driven approach?

For more:
- here's the IDD article (for FierceFinance readers)

Related Articles:
Navigating the Hedge Fund Maze - September 2008
Navigating the Hedge Fund Maze - August 2008