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Wake-up call for hedge fund investors

Many major US insurance firms are doing a rethink, following steep losses in their hedge fund investments during the last quarter.

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LITTLE CHEER FOR INVESTORS: US hedge funds have failed to deliver on their promise to provide high equity-like returns with less volatility.

LIKE many sophisticated investors, the nation's largest insurers drank the hedge fund Kool-Aid, pouring billions into the high-fee investment funds and helping drive hedge fund assets to more than US$3 trillion.

Now comes the hangover.

Steep losses in hedge fund investments during