Prime broker rage

The collapse of Lehman Brothers swallowed $40 billion in hedge fund collateral, with rehypothecated assets appearing to be all but irrecoverable. What are the prospects for those hedge funds with assets trapped within the defunct dealer? Peter Madigan reports

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The oft-touted claim that a good hedge fund manager can generate positive returns in even the most volatile of markets has been thoroughly tested by the unprecedented events of 2008. Funds of all sizes have taken a pounding in the second half of the year amid a spike in volatility and correlation and an evaporation of liquidity, forcing large-scale deleveraging and a surge in redemption requests by investors.

Of the 16 strategies indexes monitored by Chicago-based data provider Hedge Fund

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