Hedge funds in recovery

Private equity and hedge funds that were hit by the storm of the financial meltdown are now benefiting from a return of bank financing, deals, and pockets of opportunity to exit investments. Buyout firms have benefited from higher valuations for their portfolios and the ability to take some of their deals public, as seen by earnings released this week from Blackstone Group and Kohlberg Kravis Roberts & Co. Hedge funds, which were hammered by losses of 19 percent in 2008, rode last year's market rally to return 20 percent in 2009, according to Hedge Fund Research. Still, executives face a challenge in generating returns and meeting investor demands for lower fees and more information from their portfolios.