"The hedge fund is being questioned, and it's in danger," says Timothy Brog of Locksmith Capital Management, an activist New York hedge fund.
Indeed, the industry is moving into survival mode for 2009 -- and many funds won't make it. The number of hedge funds, which surged in recent years to an estimated 10,000, could eventually fall to about half that, as small, marginal players are sold or go out of business.
Small? Marginal? That's the thing about this much trumpeted creative destruction that makes capitalism tick - it hurts the little guy.
The big guys just get bailed out.