contracts for natural gas. many hedge funds also use complex trade strategies, where they try to find discrepancies between different derivative prices or maturities and their theoretical values. the well - known hedge fund long term capital management ( ltcm ), which crashed in 1998, was this type of fund. developments internationally and in sweden over the past ten years, hedge funds have grown considerably, both in terms of number and the amount of capital managed. internationally, the capital managed has grown by almost 30 per cent a year since 1998. today the hedge funds manage approximately usd 1, 000 billion, corresponding to around 5 per cent of the total capital managed internationally, divided between 8, 000 funds. most hedge funds are relatively small, most have fewer than sek 800 million in managed capital and almost half of them have less than sek 200 million. however, there are exceptions. ltcm – which was gigantic – had at most a capital of around sek 70 billion. this can be compared, for instance, with the state pension funds in sweden, which each manage capital amounting to around sek 150 million. the hedge fund market has also developed rapidly in sweden. brummer & partners were first in sweden, with their hedge fund zenit, in summer 1996. nektar, which operates in the fixed income and foreign exchange market, and originally followed jones ’ ideas completely, came soon after. since then around 60 more funds have been established and the capital managed has gradually increased. today, hedge funds account for a good six per cent of the total capital managed in swedish - registered funds. this percentage has more than doubled over the past ten years and now corresponds to just over sek 85 billion. the size of the swedish hedge funds varies substantially. the largest swedish hedge fund had at the end of june 2005 a market value of a good sek 26 billion, which is a considerable sum even in an international perspective. the smallest fund at the same time had a negative market value of sek 5 million. the median fund had a market value of around sek 225 million. [ figure 1 ] the hedge funds ’ earnings over the past ten years may not appear that fantastic at first glance. one of the largest hedge fund indices, credit suisse / tremont has over the past twelve years had an average increase in value of around 8 per cent, similar to the s & p 500. however, if one takes into account the low risk in most hedge funds, the picture

’ s innovations, such as the internet and mobile technology, he says, do not provide any major productivity gains in the long term. a reduction in global willingness to invest may thus be due to a slower pace of innovation. this means there are fewer profitable projects in which to invest.... but there may also be other reasons according to the theory of secular stagnation, the falling real interest rates may be a sign of a shortage of investment opportunities for companies. but has this actually been the case? one way of investigating this is to study the return on companies ’ capital stock. figure 4 ( a ) shows the real return on capital in the us between 2000 and 2016. as can be seen, return has been stable with relatively minor variations around just below 9 per cent while the real interest rate has shown a falling trend. after the financial crisis, return on capital has even risen slightly, suggesting good investment opportunities. investment growth after the financial crisis is in line with such a hypothesis. figure 4 ( b ) shows that investments have risen relatively rapidly since 2010 and are now close to or above their long - term trend. none of this is easy to reconcile with secular stagnation. 7 6 see gordon ( 2012 ). 7 see gomme et al. ( 2015 ) for further discussions. 8 figure 4. real return on capital, real interest rate and investments in the united states 4 ( a ) return on capi tal and real interes t ra te 4 ( b ) investments i n the business sector real interest rate, 5 years return on capital investments investments, nonresidential - 2 note. fi gure 4 ( a ), per cent. return on capital in the business sector. broken lines show a verage return on ca pital s ince the year 2000. real interest ra te refers to 5 - year real government bonds. fi gure 4 ( b ), usd billion. the broken trend l ines have been calculated using the hp filter. sources : gomme et al. ( 2011 ), bureau of economic analysis, federal reserve and the riksbank we can observe that the development in sweden has been similar. figure 5 ( a ) shows that the real return on capital in sweden between 2000 and 2016 has been relatively stable with minor variations around slightly below 8 per cent while the real interest rate has shown a falling trend. figure 5 ( b ) shows that investment is also close to or slightly above its long - term trend in sweden