A majority of hedge fund managers say a U.S. recession is very likely in 2008, but fewer than one in five said an economic slowdown would be bad for their funds, a survey of several-hundred hedge fund managers released on Tuesday found.

Rothstein Kass, a provider of auditing and tax services for funds, said it sponsored the survey that polled 239 hedge fund principals with a median $492 million in assets under management.

More than 61 percent of those polled said they believed a recession was very likely in 2008, the survey found.

Still, only 17 percent of those surveyed viewed an economic downturn as bad news for their funds, with some 66 percent suggesting a recession would bring investment opportunities.

Respondents seem undaunted by prospects for a recession in 2008, said Howard Altman, co-managing principal at Rothstein Kass. While over 43 percent will likely change their fund's particular investments, fewer than 15 percent anticipated changes to the fund's underlying investment strategy.

While a small opinion sample in a $1.8 trillion hedge fund industry that includes nearly 10,000 funds, the survey suggests that a significant portion of active traders think U.S. economic growth is poised to reverse.

Another 87 percent of those interviewed predicted market volatility would continue or increase for the rest of 2007.

Investment