This Business Week article reports that net inflows of money into hedge funds have dried up, performance has lagged the broader market (although several commenters take issue with the index used for comparison), and 484 funds, more than 6% of the total, have shut down during the first three quarters of 2005 (data for the 4th quarter isn’t available yet). Conversely, as I noted in this post yesterday, inflows into buyout and venture funds are way up. It looks like some sector rotation is going on.