The growth prospects of the global hedge fund market – worth almost $2,000bn (£1,400bn) – are in doubt. Funds are being forced to de-lever and sit on large cash balances as the prime brokers they largely depend on for financing face severe pressure.
The collapse of Bear Stearns and Lehman Brothers has forced hundreds of hedge funds that used the banks as their prime brokers to look elsewhere for their funding and support.
