Emmanuel Roman, the co-chief executive of Europe`s biggest hedge fund GLG,
has warned that thousands of hedge funds are on the brink of failure as the
global economy contracts with unexpected severity.
By Rowena Mason
The Telegraph (UK)
Last Updated: 5:50PM BST 24 Oct 2008
Emmanuel Roman, of GLG Partners, said 25pc-30pc of the world¢s 8,000 hedge funds
would disappear "in a Darwinian process", either going bust or deciding meagre profits are
not worth their efforts.
"This will go down in the history books as one of the greatest fiascos of banking in 100 years,"
said Mr Roman, who with Noam Gottesman, co-runs GLG, a former division of Lehman Brothers
Holdings with assets of $24bn (£14.8bn). "There need to be some scapegoats, and the regulators
are going to go hunt people. That will be good in the long run."
His views were echoed by Professor Nouriel Roubini, a former US Treasury and presidential
adviser known for his accurate prediction of financial crises, who estimated that up to 500 hedge
funds would fail within months.
Both men were speaking at the same hedge fund conference in London yesterday, and
Prof Roubini said he would not be surprised if the US and other countries soon had to
close their stock markets for more than a week to halt descent into "sheer panic".
The economist warned that the world is heading for a protracted recession that will end
the US`s financial dominance.
"It`s the beginning of the decline of the US financial empire. The Great Depression ended
in a massive war. I hope that`s not going to happen but it`s pretty ugly now," Prof Roubini said.
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Thanks to Don N. for bringing this to my attention!