Jim Rogers, co-founder of the Quantum hedge fund along with George Soros, admitted his lack of enthusiasm about the future of the hedge fund industry as stocks and bonds show poor performance and quality managers are rare.

 

``I'm not too optimistic about hedge funds and fund of funds because you won't be making a lot of money from stocks in the next 15 to 20 years and bonds will be doing horribly,'' Rogers said at a hedge fund conference in

Tokyo. ``I'm told there are almost 10,000 hedge funds today, with overcrowding there will be some charlatans and incompetence, and you can't have that many smart 29-year-olds around.''

 

Rogers expressed doubts with respect to those managers who made their reputations on the wave of increase in stock and bond prices. They will experience difficulty trying to replicate their success in the future.

Hedge funds that have been gaining popularity of late are in fact loosely regulated investment pools. They were constructed to derive profit from market fluctuations and do well when markets rise or fall. So far hedge funds have been the fastest-growing part of asset management sphere.

 

In the first nine months of 2004, hedge funds globally attracted more than $100 billion in funds, says Tremont Capital Management Inc. By the estimates of the Rye, New York-based money manager and research firm, the hedge fund industry now holds $890 billion in assets.