Hedge Funds Slash Overhead, Vendors Reap The Rewards

By Hung Tran -- As assets under management dwindle and performance fees fall, hedge funds are increasingly looking for ways to cut costs. But choosing whether or not to outsource certain operations—especially those that have traditionally been done in-house, such as risk management—is a big decision. Managers must not only look at the potential cost savings, but must also consider the quality, reliability and security of their vendors. Despite the caveats, hedge funds are increasingly taking the leap.