UBP Stakes Claim As Hedge Fund ‘Survivor’

Nov 26 2008 | 3:08am ET

While many banks are fleeing the hedge fund industry, Switzerland’s Union Bancaire Privée is standing pat, ready to fill the holes left when the markets settle.

UBP predicts that the hedge fund industry will contract by between 30% and 35%, creating “some unique opportunities” for those that left.

“Only the best will survive and will be able to seize the space left vacant by others,” Jan Erik Frogg, head of alternative investments at UBP, told Reuters. UBP intends to be a survivor, and is positioning itself with that in mind.

“Those surviving won’t be the funds with the best return, but the most prudent ones,” Frogg said. “The year 2008 will be the new reference point for the sector.”

UBP is not closing its funds or returning money to clients, hoping to capitalize on its infrastructure and pick up investors who have redeemed their other hedge fund investments or seen those hedge funds go belly-up.

The industry is in “hibernation but is not dead,” Frogg said, though he noted that trading strategies will become more popular, while arbitrage strategies—among the hardest hit in the recent hedge fund slide—will decline.

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