Hedge funds - Survival of the fittest

Hedge funds are facing an uncertain future, with a record number going bust in 2005. So what do hedge funds need to do to survive in today's dog-eat-dog environment? Saskia Scholtes reports

On the face of it, starting a hedge fund has never been easier. For one, the collective experience of prime brokers and other service providers - who have helped to launch literally thousands of new funds over the last few years - have turned the practicalities of the start-up process into a well-practised drill. But more importantly, global markets are awash with money looking for a home in alternative strategies.

Industry tracker Hedge Fund Research (HFR) recorded a $46.9 billion