Every January for the past two decades, a clutch of hedge fund titans and their top investors have cloistered themselves at Palm Beach’s plush Breakers Hotel to wine, dine and gossip in the balmy Floridian weather.
Although the exclusive Morgan Stanley-arranged event is one of the social occasions of the year for some of the lucky invitees, the mood has been downbeat for much of the post-financial crisis era — deflated by disappointing returns and dwindling investor faith.
Attempting to lean against the era of super-easy central bank monetary policy has been painful, and the market tranquility it has caused robbed many hedge funds of the opportunities they crave. Instead, they have had to watch rival private equity tycoons struggle to invest the piles of money they have raised, and trillions of dollars flow into cheap, passive index funds, some of which promise to replicate what hedge funds do at a fraction of the price.