Hedge funds continue to face challenges as investors remain cautious

The financial crisis continues to haunt the hedge fund industry as investment flows pick up but remain concentrated in the big funds while some regulatory certainty should encourage growth.

Entering the home stretch of 2010 the world may seem to be more ordered and stable but a closer look will show it to be otherwise. The repercussions of the financial crisis are still being played out, noticeably in the US and Europe.

First, a stressed US administration, panicked at the prospect of electoral defeat, has been notching up the useful platitudes for voters, foreign countries and international organisations. The somewhat woolly logic of the average US politician, and particularly the