Bigger may be better as smaller hedge funds give up

http://in.reuters.com/article/governmentFilingsNews/idINN0325515320080707


Bigger may be better as smaller hedge funds give up
Tue Jul 8, 2008 2:27am IST

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By Svea Herbst-Bayliss

BOSTON, July 7 (Reuters) - Bigger may really be better for hedge funds at a time the $2 trillion industry's smaller players face tough choices of either merging or being forced out of business.

In the first six months of 2008, more than a dozen smaller funds have already agreed to let larger players own a piece of them, and investors and managers expect that pace to quicken.

Man Group (EMG.L: Quote, Profile, Research), the world's largest publicly traded hedge fund group, has taken stakes in Ore Hill Capital and Nephila Capital, while Goldman Sachs' (GS.N: Quote, Profile, Research) Petershill unit has taken stakes in Capula Management, Claren Road Asset Management and Trafalgar Asset Managers.

rest of article here:
http://in.reuters.com/article/governmentFilingsNews/idINN0325515320080707
 
Quote from archon:[/i]

....investors and managers expect that pace to quicken......

If there's pressure on management fees and performance fees, "bigger" will be better. The smaller funds may not be able to cover their overhead in such an environment. It'll be interesting to see if overall rates of return keep diminishing. We'll see.
 
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