The fall and rise of a trillion-dollar industryJust three years ago, hedge funds were at thetop of the investment world. Years of unparalleledgrowth had pushed assets to nearly$3 trillion. Leverage was used so aggressivelythat total long and short investments approachedan astonishing $10 trillion. Thousandsof new funds had sprouted in every corner ofthe market, and managers, enjoying an almostunimaginable pool of fees, were dubbed thenew masters of the universe.Then came 2008.The industry suffered itsworst performance ever, losing $600 billionor roughly 20% in a single year. Multibilliondollarhedge funds collapsed overnight, epicfrauds were revealed, and assets plummetedas spooked investors scrambled to get theirmoney back.The near collapse of the industry is one of themost dramatic stories of the global economicmeltdown. Its also among the most instructivebecause hedge funds are still alive and,if managed wisely, will emerge stronger thanever in the coming years.In Hedge Funds Humbled, industry insiderTrevor Ganshaw provides a detailed primerof the industry and explains how the peoplewho earned more than $100 billion in feesduring their short but happy heyday plantedthe seeds of their own destruction. He paintsa vivid picture of how the industry leadersmajor mistakes destroyed hundreds of billionsof investor capital; Ganshaw calls them theseven deadly sins of the hedge fund industry:Out-of-control leverageInadequate risk managementFlawed fee structuresOvercrowded strategiesThe Peter Principle oftoo much capitalCapital instabilityFraud, enabled by lax controlsGanshaw examines the future of the industryand shows investors what to look for and whatto avoid. Theres still money to be made inhedge funds and, in his estimation, the industryis poised for a comeback. As all goodhedge fund managers know, greed is good,he writes. Humility, it seems, may now be anessential part of keeping it that way.More dramatic than fiction, Hedge FundsHumbled is a timely work that provides a criticallook at an industry gone badand an optimisticlook at its future.