Hedge fund performance has collapsed while the financial crisis has been worsening. Indeed, hedge funds are part of the shadow banking system that is at the heart of the crisis. They embody all the weaknesses that have engineered the mess: excess leverage, opaque activities, illusory alpha,...

The 2007-2008 crisis has highlighted the tensions related to lack of transparency and asymmetrical information in the hedge fund industry. Damage can be estimated at a micro level by a misallocation induced by a double (ex ante and ex post) asymmetry and at a macro level by increasing financial...

Pension fund return s can be decomposed into different sources, including market movements, asset allo-cation policy, and active portfolio management. We use a unique database covering the asset allocations of US defined-benefit pension funds for the perio d 1990–2008, and we test the role...

This paper deals with two issues. On the one hand, it shows that structural changes in financial markets and in the hedge funds industry make the ?light-touch? arguments for regulating hedge funds no longer relevant. On the other hand, pleas for stronger regulation of hedge funds are getting...