publication . Preprint . 2008

Market conditions and hedge fund survival

Mark A. Carlson; Jason Steinman;
Open Access
  • Published: 01 Jan 2008
As the hedge fund industry has grown, there has been increased concern that, during sharp market moves, hedge fund failures could exacerbate the deterioration in financial conditions and deepen a crisis. However, there has not been much formal analysis regarding the impact of financial market conditions on hedge fund survival. To help fill this gap, this paper examines the relationship between financial market conditions and the likelihood of hedge fund failure after controlling for performance and other characteristics. The analysis is conducted using data on individual funds and industry aggregates. We find that market returns and volatility influence fund fai...
free text keywords: Hedge funds

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