Deals for hedge funds to soar?

Alternatives investments firms were seen as attractive properties for big banks before the financial crisis really took hold. Deals involving hedge funds (hedge fund news) especially were all the rage.

Citigroup, Merrill, JP Morgan, and "other big-name investment banks scrambled over each other to write checks for hedge fund firms, much to the partners of those firms delight," notes AllAboutAlpha.com. But some of those deals simply did not pan out, and as the crisis deepened, buyer's remorse settled in.

Now that the crisis is abating a bit, deals are once again back on the table. Deals involving alternative asset managers hit a record in 2010, representing nearly half of all deal activity in the asset management sector in the first half of the year, according to a report by Jefferies. That compares with about 25 percent in the first half of 2009.

It may be that the mere specter of Dodd-Frank provided some impetus for divestitures--or the fact that some founders think the time is right to finally cash out.

But it also matters that the fundamentals of many hedge fund companies are once again attractive right now. The hedge funds that improved their processes through the crisis and hung onto clients are in good shape. More deals are likely.

For more:
- here's the article
- here's a release

Related Articles:
Hedge funds choose Citigroup over Bank of America
Hedge fund aims to punish media leaker
Should more pensions get tough with hedge funds?
Hedge fund honchos wonder if it's time to quit
Zoe Cruz hedge funds debut

Post a comment