Hedge Funds: Hedge funds may see a new dawn, analysts say—but sailing won’t be smooth

Does the hedge-fund business finally have the wind at its back?

Following a rough 2016, a year marked by high-profile fund closures, redemptions, and underperformance, analysts are increasingly optimistic that the new year, along with the new presidential administration, will mean a turnaround for the beleaguered industry. But while the expected economic environment could increase the potential for outperformance, many of the long-term headwinds facing hedge funds will likely remain intact.

Analyst optimism is in part due to President Donald Trump’s administration, which has pledged to cut both taxes and financial regulation, leading to an economic environment that is expected to be more hospitable to businesses.

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