Hedge fund refers to an investment fund that pools together its capital from either
accredited investors or institutional investors and thereafter invests in assets that have a
complicated portfolio and techniques that manage risk. Hedge funds are strictly availed to
accredited investors and not offered or sold to the general public. The 2008-09 financial crisis
often called the global financial crisis was according to economists the most severe since the
great depression of the early 20 th century. The subprime mortgage market crisis in 2007 marked
the beginning of the global financial crisis. The great financial crisis had not yet been
pronounced a banking crisis until September 15 th 2008 when Lehman Brothers; an investment
bank collapsed. The ability of banks such as Lehman Brothers to engage in excessive risk
endeavors made the crisis to attract global attention. The great recession hat was characterized by
the global economic downturn was the results of the 2008-09 financial crisis. As a way of
promoting financial stability in the United States, the Dodd-Frank Wall Street reforms and
Consumer Protection Act was enacted. Hedge Fund 2008-09 Financial Crisis

By 2008, about 17% of homeowners had a mortgage that was higher in value compared
to their homes. In attempt to remedy the situation, quasi- government agencies, Fannie Mae and Freddie Mac as well as Wall Street investment begun to package together the mortgages; a
process referred to as securitization (Orhangazi p.28). Things got out of hand when Wall Street
investment combined both prime and sub-prime mortgages in one investment and dabbed it
“credit default swaps (CDS)”. To make the situation even worse, the management decided to
leverage the “credit default swaps” and as a result, the homeowners started to default mortgages
underlying the CDS portfolio. Hedge Fund 2008-09 Financial Crisis
After the financial crisis, the hedge fund managers had to agree on some measures to help
recover from the crisis.

Use Chicago style of referencing