Survey: Recession in 2008 Considered "Very Likely" by Hedge Funds

CPA firm Rothstein Kass sponsored a poll of hedge fund principals to gauge their assessment of the economy. According to the results of the poll, the U.S. is heading for a recession in 2008, with over 61% of the respondents believing a recession is "very likely". Almost 90% of the hedge fund principals interviewed predicted that market volatility will continue or increase through the rest of 2007.

The "flash survey" was conducted by Russ Prince on behalf of the CPA firm. The conductor of the survey, Russ Alan Prince, is an author of over 40 books on private wealth and is highly sought as a counselor to families with significant resources. Rothstein Kass provides services to hedge funds, private equity funds, broker-dealers and registered investment advisors.

"As trusted advisors to the hedge fund community, Rothstein Kass is constantly seeking insight into the economic trends impacting the industry.
By combining the firm's unique expertise with our research capabilities, our Flash Surveys offer a snapshot view of how the industry is adapting to a rapidly changing business environment," said Prince. "In light of increasingly widespread predictions of a recession, we decided to again speak directly with senior hedge fund principals to determine whether they feel a recession is imminent."

Over 200 hedge fund principals were surveyed, all having a minimum of $100 million in assets being managed and being in operation for at least 5 years. Surprisingly, only 17% thought a recession would have a negative effect on their funds. Almost 67% said that a recession would actually provide opportunites for investment. The Co-Managing Principal of Rothstein Kass, Howar Altman, pointed to the ability of hudge funds to outperform in turbulent markets as the reason for this confidence.

"An important part of hedge funds' appeal is their ability to outperform in turbulent or recessionary market conditions. It makes perfect sense that principals would be focused on the opportunities that current market conditions provide. In fact, over 81% of principals said that market volatility favors hedge funds over traditional investment vehicles." said Altman.

"Respondents also seem undaunted by the prospects of a recession in 2008. While over 43% will likely change their fund's particular investments, fewer than 15% anticipated changes to the fund's underlying investment strategy."

For the super-rich world of hedge funds, it seems, the consensus that a recession is on the horizon is not a gloomy forecast, but an opportunity for their clients.
SOURCE:

Rothstein Kass, Hedge Funds Anticipate Recession in 2008, PR Newswire