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Hedge Funds - Masters Of The Universe No More

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Following their worst year ever, hedge fund superheroes are in for some heavy lifting in 2009. Collectively the industry lost a fifth of their clients' money and 2008 forced some of the most-notable power players including Citadel's Ken Griffin to throw down a gate to keep investors from pulling cash.

2009 will see the number of funds shrink to 5,000 from 10,000 at their peak and those survivors will deal with increased regulation and a shaken and skeptical populace. But all is not lost for Wall Street's one-time best & brightest.

Hedge funds still managed to beat the 40 percent drop in the overall market last year. And after taking the end of 2008 off, some say the survivors may be ready to reload fueling a rally in the first half of this year.

What does the future hold for the fastest money on the Street?

“Hedge funds will come back and investors will throw money at those that have survived,” says Guy Adami. “I expect to see more money in fewer hands.”

“However regulation might be coming,” counters Karen Finerman. “I think we could see some kind of new guideline or ceiling on leverage.”


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Trader disclosure: On Jan 6, 2009, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders: Adami Owns (AGU), (BTU), (C), (GS), (INTC), (MSFT), (NUE); Macke Owns (MSFT), (TM), (MOS), (WMT); Najarian Owns (CSCO), (ERTS), (MSFT), (GS), (XLB), (EEM); Najarian Owns Short Calls (MSFT); Najarian Own (NVDA) Long Sread ; Finerman's Firm Owns (MSFT), (EEM), (DNA); Finerman's Firm Is Short (IYR), (IWM), (MDY), (SPY), (USO), (IJR), (BBT), (GNK)



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