The Return of Hedge Funds
A few articles have recently came out regarding the turn around of the hedge fund industry. Many new hedge funds have been started this year and many existing funds are launching new strategies or taking over some bank-like activities. Below is an article discussing what the hedge fund industry will now be like, I disagree with the assessment that there will be less small hedge funds but I agree that funds are taking over some investment banking activities and growing in AUM right now:
There are signs of life returning to the hedge-fund industry. Assets under management are rising. New funds are being launched. Some are even making money.
Reports of hedge funds' demise are exaggerated even if it isn't quite time to raise prices in Mayfair's fancy restaurants, or get into the interior-decoration business in the Hamptons. The industry is going to stick around as an important part of the financial universe.
It would be crazy to imagine that things will go back to the way they were before the markets collapsed in 2008.
Hedge-Fund Industry 2.0 - as one would say in computer-speak - will be very different from Hedge-Fund Industry 1.0. It will be less mysterious; investors will take more control; it will move into the space vacated by investment banks; and there will be fewer, but much larger, funds.
Right now, there is plenty of evidence that investors are willing to put money into the funds again. Read more...
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