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The article reports that hedge funds are entering a period during which investors wishing to withdraw money must make that fact known. Survey data indicate over one-third of hedge-fund investors have pulled money out or intend to do so. Among notable funds that have suffered from market volatility during 2011 are Pershing Square Capital Management and Paulson & Co.

The article discusses the poor performance during 2011 of funds managed by billionaire John Paulson's hedge-fund company Paulson & Co. One fund that concentrates on gold declined over 16% in value during September 2011. A second fund designed to benefit from an improving U.S. economy has fallen over 30% in 2011. A third fund has declined 47%.

The article reports that hedge-fund company Bridgewater Associates is nearly done raising money for a new $10 billion fund. Founded by Ray Dalio, Bridgewater is among hedge-fund firms that are attracting funds from investors including college endowments and wealthy families eager to take on additional risk.

The article reports that total assets under management at hedge funds are rising to levels not seen since the advent of the 2008-2009 global financial crisis. During 2010 hedge funds experienced over $55 billion of net cash inflows. Beneficiaries include relatively smaller funds that some investors have previously been reluctant to use.

The article discusses cash flows into and out of hedge funds during the final quarter of 2011, with commentary presented on an overall outflow of $127 million for the quarter, the ability of large funds with at least $5 billion under management to attract new money, and the industry's investment performance during 2009-2011.

The article reports that hedge funds, brokers, and other investors are positioning themselves to take advantage of poorly performing assets held by hedge-fund manager John Paulson's Paulson & Co. Some funds have sold assets they hold in common with Paulson out of fear Paulson will be forced to sell to raise cash. Paulson has reportedly turned down low-priced offers he has received for some of his holdings including bonds in defunct investment bank Lehman Brothers Holdings Inc..