Merrill Lynch: 20% Of Hedge Funds Could Be Doomed

Sep 21 2010 | 9:37am ET

Consolidation isn’t the only force likely to shrink the hedge fund industry, according to a new report.

Bank of America Merrill Lynch predicts that as many as one in five hedge funds could be liquidated by next year. The culprit? A brutal fundraising environment in which investors increasingly prefer larger hedge fund managers.

“Going into the year-end, there will be significant closures and we estimate it could be as high as 20%,” the firm’s Justin Fredericks told Bloomberg News. “A large portion of managers are still below high-water marks. Performance is flat and money hasn’t been flowing to smaller managers.”

Hedge fund managers running less than $100 million are the most likely to be affected by the hedgicide, Fredericks, Merrill’s head of U.S. capital introductions said.


In Depth

Q&A: Old Hill's Stone On Private Debt, P2P And Credit Bubbles

Jun 6 2017 | 7:52pm ET

While institutional capital continues to flow into the broader private debt sector...

Lifestyle

CFA Institute To Add Computer Science To Exam Curriculum

May 24 2017 | 9:25pm ET

Starting in 2019, financial industry executives sitting for the coveted Chartered...

Guest Contributor

Steinbrugge: Asia-Focused Hedge Funds Offer Great Opportunities

Jun 23 2017 | 3:33pm ET

Emerging market strategies have outperformed their developed-market peers for five...

 

From the current issue of