<p>CNI has most of his information correct. Bear Stearn’s hedge fund collapse was the one thing that really exposed all of Wall St.'s mess. However, no one can argue that Bear Stearns collapsed because of its two hedge funds; it was a string of events including stupid short sellers, terrible management, and a string of unlucky events and bank runs.
Point is, there are great hedge funds and there are ****ty hedge funds. I think most people who graduate with a finance background can get into a hedge fund if they really wanted to (heck they can even start their own hedge fund with their own capital). The elite hedge funds, such as Och-Ziff, Citadel, Bridgewater, ESL, DE Shaw, Perry, Fortress…etc, are almost impossible to get into after undergrad. Unless you have a degree from Harvard, Princeton, or Wharton and have previous banking/prop trading experience from a reputable bank, you basically have no chance of interviewing with these places. These are the hedge funds that you hear people making millions and billions. Most hedge funds, of course, fail…</p>
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That made me laugh. Almost all the good hedge funds are getting killed. Take Goldman, for example, their internal hedge funds haven’t been having a good year. Their quant fund, Global Alpha, is down a lot. Citadel had a rough year. Ritchie Capital which was featured in the WSJ last week is almost going broke. GLG partners, one of Europe’s biggest hedge funds, lost their star trader and their emerging markets fund is down huge after posting massive gains. It’s not just funds with exposure to MBS that are being hit, pretty much everyone.</p>
<p>Some of the comments Watson made are completely ridiculous, but alas, this is only an online forum and we’re all here to learn right?</p>