WEST PALM BEACH, FL (www.hedgeco.net) –
Hedge fund take-over deals seem to be slowing down according speakers at the Reuters Hedge Fund Summit. Conference attendees were also told that it is likely that older hedge fund managers who may be planning to retire from active trading and management may also trigger additional consolidation within the industry. John Paulson, founder of hedge fund Paulson & Co, told Reuters, “It hasn’t been that big a trend, but I think as the industry matures, we’ll see more consolidation and perhaps more publicly listed (hedge fund) companies.”
Some hedge fund analysts had previously believed that by the beginning of the year 2005, many additional hedge fund firms would be going public by listing their funds with stock market operators. Such trend has failed to materialize in 2005, and experts think that poor hedge fund performance during the first half of the year may have temporary halted such plans. During the first quarter of 2005, the credit issues of automakers helped to create withdrawals and declines experienced in credit arbitrage managers and other hedge fund strategies.
Several investment banks bought stakes in hedge funds, for instance JP Morgan Chase acquired Highbridge Capital and Lehman Brothers purchased a 20 percent stake in Ospraie hedge fund firm. Jane Buchan, chief executive officer of Pacific Alternative Asset Management Co said, “I do see large financial institutions who can’t attract that capability continuing … to buy hedge funds and funds of hedge funds.†Adding, “A lot of these large hedge funds are being run by people who are now approaching their late 40s … do they turn it over to junior or do they try to monetize?”
Speakers at the Reuter’s Hedge Fund Summit believe that the category of Fund of Hedge Funds will continue to attract investor interest. Such managers invest in different hedge fund styles, and their high standards of due diligence have been found to be attractive to institutional managers, such as pension funds and endowments.
Paul Oranika
Contributing Writer
HedgeCo.Net
Email: Editor@hedgeco.net
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