Economic Times – Hedge fund managers can make you rich quicker than just about anyone. Sometimes, they can make you poor even faster. Just look at Amaranth Advisors, the Greenwich, Connecticut-basedhedge fund manager that stumbled over wrong-way bets on natural gas. Going into September, Amaranth was up 26% in 2006. By October, it had lost $6.6 billion. The next Amaranth is out there somewhere.Bloomberg News, using data compiled by Chicago-based Hedge Fund Research and Bloomberg, has ranked the world’s best-performing hedge funds in six investment strategies: emerging markets, distressed,event driven, long/short equity, fixed income and macro.
Since 2000, the secretive world of hedge funds has more than doubled in size. There are now more than 9,000 of these funds with combined assets of $1.34 trillion. Everyone from Wall Street chieftainsto the stewards of retirement nest eggs is chasing these funds, which are private pools of capital that allow managers to participate substantially in the investment returns they generate forclients.
Investors poured a record $110.7 billion into these vehicles during the first nine months of 2006  more than twice what they did in all of 2005. Since September, Morgan Stanley has bought stakes intwo hedge-fund firms and purchased a third outright. And since late 2005, Goldman Sachs Group has become the largest manager of hedge fund money, with $29.5 billion in assets, according to HFR andBloomberg. Goldman passed Westport, Connecticut-based Bridgewater Associates, which has $28 billion in assets, and New York-based D.E. Shaw & Co, which has $23.2 billion.
