Regulatory, investor demands to favour hedge M&A

After years of unprecedented growth in the hedge fund industry, tough market conditions and investor defections are pushing some funds into closure while others may be forced to merge to survive, industry experts say.

Increased investor expectations and a higher regulatory burden will have the greatest impact on smaller funds, whose only source of income this year is likely to be a management fee of one or two percent of assets.

"I think there will be a number of managers in the alternative space which will not survive," Stephen Zimmerman, Newsmith Asset Management said at the GAIM conference this week, adding some previously viable funds risked being swamped by rising costs.

Read Full Article from Reuters

- Posted: 2009-06-19 08:45:47

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