Question: How have hedge funds weathered the credit crisis?

Thomas Cooley:  Well, again, some of the hedge funds are doing very well.  The hedge fund that bet against mortgages that sort of made big bets against sub-prime lending, did phenomenally well.  And many of the others did very well also.  So Renaissance Technologies, for example, which is a quantitative hedge fund, had a banner year.  So they made lots of money.  A lot of people thought that the problems-- that risks of the credit markets were going to come from hedge funds.  Instead they came from investment banks and other banks.  And so, I think there will be though, at the end of this process, a bit of a shakeout in the hedge fund industry.  We'll see a lot of the less successful, weaker funds, going out of business.  I don't think we've seen all the losses yet, so.

Recorded: 3/21/08