When Alan Greenspan, former US Federal Reserve chairman, first uttered the now infamous phrase "irrational exuberance", he did not have hedge funds in mind. Indeed, the overvalued market conditions of 1996 are quite a distance away from the financial turmoil persisting in today's markets.
However, hedge funds may be feeling a bit of deja vu. Despite the doom and gloom of the last 12-plus months, hedge funds are thriving. The number of hedge funds launching is picking up, despite the predictions o