2009 looks bad for hedge funds

The hedge fund industry lost 7 percent of funds in the first three quarters of 2008, the Associated Press reports. That’s up more than 70 percent from the same period a year before, and more funds are expected to fall in 2009.

After peaking in June at $1.93 trillion, hedge fund assets have since fallen to $1.56 billion. AP cites Hedge Fund Research: “The average hedge fund lost 18 percent of its value in 2008, the industry’s worst performance on record and down from an average gain of 9.96 percent in 2007.” The industry’s only other negative year was 2002, when funds lost an average 1.45 percent.