Madison Street Capital recently released their 4th edition hedge fund industry M&A overview. The report made mention of the 42 hedge fund deals that were either closed or announced in 2015. Keep in mind these are deals from around the world.
The 42 deals was a pretty decent increase from 2014 when the number of hedge fund deals was 32. Additionally, transaction volume for 2015, which is measured by AUM, was just under 30% higher than it was in 2014. Based on the volume of transactions that took place in 2015, and several other factors that are driving deal momentum, it looks like 2016 is going to be a record year for hedge fund M&A transactions.
Here is a brief summary of the report:
Though most hedge fund strategies had a mediocre performance in 2015, hedge fund industry assets are currently at an all time high. Due to hedge funds not performing as expected, many institutional investors started assigning more funds to the alternative asset management sector.
The hope is they will be able to achieve higher returns and match rising liabilities. Smaller hedge fund managers aren’t having great success as attracting new capital has not been easy. Higher operational costs and downward pressure on fees is forcing managers to seek out alternative strategies.
Karl D’Cunha, the Senior Managing Director at Madison Street Capital, was quoted as saying, “The deal environment for the hedge fund industry was strong in 2015 and will be even stronger in 2016.”
About Madison Street Capital
Madison Street Capital is one of the largest international investment banking firms in the world. They are an integrated, full-service advisory company with clients all over the globe. They help hedge fund managers with Portfolio Valuation, Financial Sponsor Coverage, Capital Introduction, Financial Restructuring and M&A Advisory.
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