Plaintiffs' Personal Injury Law Firm

Hedge Fund Losses

Napoli Bern Ripka LLP is currently seeking clients who have incurred losses due to mismanagement of their capital by hedge fund managers. Since the well-publicized blow-up of Long-Term Capital Management in 1998 and the bursting of the tech bubble, hedge funds had experienced a great run of success from 2003 through 2007, mirroring the bull-run in the U.S. stock market during this time. Due to the fact that many hedge funds were producing returns in the mid-to-low teens, along with promises made to investors of downside protection against losses, the amount of capital invested in hedge funds grew at an annual rate of around 20% and thousands of new funds were launched from 20003 through 2007. Institutional investors invested billions of dollars of capital in hedge funds, relying on the marketing of management teams that the funds could preserve capital and produce positive returns even in down markets by hedging bets through both long and short investments.

As the overall stock and credit markets began to turn south in 2008 during the credit crisis and ensuing recession, many hedge funds incurred major losses as investments declined and liquidity dried up. Institutional investors, such as pension funds and endowments, and high-net worth individuals were left with severely diminished portfolios as a result of poor risk management, over-concentration, directional investments, and risky investments in illiquid securities. Over a hundred hedge funds have shut down as a result of mismanagement of investments, and hundreds more have lost significant amounts of investor capital.

If you are an institutional investor or high net worth individual who has incurred losses due to mismanagement by hedge fund managers, please contact us regarding representation.