London-based SilverStreet Capital is looking to acquire funds of hedge funds’ businesses as part of its growth plans.

CEO Gary Vaughan-Smith said he anticipates that there will be consolidation in the hedge fund industry as a result of the ongoing issues in the financial markets and the need for some funds of funds to downsize in response to redemptions.

“With our flagship fund holding up relative to the peer group, we are in a strong position to act as a consolidator and further develop our business,” he said.

SilverStreet Capital was launched in April 2007 by Vaughan-Smith and Alex Da Costa with US $500 million in total assets. The company’s flagship multi-strategy fund, SilverStreet Leaders lost 3.3% in the third quarter of 2008, compared to a 9.6% decline for the HFR Fund of Fund Index.