Opportunities for Hedge Funds in 2009

And now for your weekly dose of optimism. Three-quarters of roughly 1,000 managers surveyed by Alpha Search Partners, an executive search firm, believe 2009 presents “the greatest investment opportunities of our lifetime.”

According to a report by FIN Alternatives, many hedge fund managers are holding up to 50% of their assets in cash, and expect to reallocate their investments away from equity long/short and event-driven strategies to investments in health care, energy and industrial sectors in 2009. They see these as the best-positioned sectors for growth in the current financial storm.

More than half of respondents (58%) thought that hedge fund redemptions will continue through at least the first half of 2009, but may stabilize and decline towards the end of the year.

As for hedge fund jobs, the Alpha Search survey reveals that nearly 36% of respondents planned to reduce staff or delay hiring, at least until the second quarter of 2009. Roughly one quarter plan to fill in the gaps in staffing by using consultants or contract employees.

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