The question of what the general max drawdown is for successful hedge funds is a bit like asking what the general max height is for successful basketball players.
Just as there are power forwards who excel at dunking and point guards who excel at shooting three-pointers, there are hedge funds that specialize in different strategies and have different risk profiles.
Therefore, it’s difficult to pinpoint a single max drawdown number that applies to all successful hedge funds.
That being said, if we’re talking about hedge funds that have a track record of delivering consistent returns over a long period of time, you can expect them to have a relatively low maximum drawdown.
This is because such funds tend to have a well-diversified portfolio, robust risk management procedures, and a disciplined investment approach.
They also typically have a long-term horizon and are not swayed by short-term market movements.
Of course, there are always exceptions to the rule, and some successful hedge funds may have experienced significant drawdowns at certain points in time.
However, these funds usually have a sound plan in place to recover from such setbacks and emerge even stronger.
In summary, while there is no one-size-fits-all answer to the question of what the general max drawdown is for successful hedge funds, you can expect such funds to have a low maximum drawdown due to their diversified portfolio, robust risk management, and long-term horizon.
And if they do experience a significant drawdown, they usually have a plan in place to recover and come out ahead.