Hedge Funds vs. Banks

Hedge Funds Serving Corporations

One long-term trend I've seen in the hedge fund industry is that hedge funds are now competing with banks within several dozen areas of business. Here is a short list of why some corporations are turning to hedge funds instead of Banks.

• Some commercial banks may not have enough money to lend because of timing or relationships in place with the corporation
• Some companies launching hostile takeovers need large amounts of cash quickly and hedge funds can sometimes provide the quickest solution at a competitive rate
• A company may need to borrow money overnight or for several days to make payroll until more of their receivables come in
• Some corporations use hedge funds to fund risky projects that wouldn’t fly with many banks
• Lately corporations have turned to hedge funds or sovereign wealth groups in times of desperation, when they need large infusions of cash to stay afloat

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