-- Record inflows are chasing too few funds, straining the performance of existing managers.
-- The industry suffers from a dearth of talent. Increased demand from investors and financial institutions is luring inexperienced entrants into hedge fund management.
-- Some strategies are becoming less effective. Heightened demand for financial instruments used by hedge funds has narrowed spreads and diminished their profits.
-- Traditionally secretive, hedge funds face big pressure by regulators and investors for more disclosure.