Hedge fund strategies protect investors in times of crisis

Frankfurt When leading hedge funds flex their muscles, billions are usually moved. In the summer, for example, Ray Dalio, the founder of the world’s largest hedge fund, Bridgewater, made a sensational bet against 29 of the 50 companies in the leading European index, the Euro Stoxx 50. And the hedge fund Elliott, headed by the legendary Paul Singer, recently caused prices to rise with its entry into the technology stocks PayPal and Pinterest.

Many industry giants were extremely successful with their strategies in the first half of the year. Bridgewater, for example, returned 32 percent on its flagship fund. This is possible because the professional speculators, for example, bet on falling prices when the stock markets are weak, bet on price differences on different stock exchanges or try to take advantage of takeover bids.