Pessimistic forecasts for hedge funds. As many as 20 percent of all hedge funds may shut down operations by the end of this year, says Bloomberg, citing analysis by the Merrill Lynch division of Bank of America.
The most vulnerable are the “small-time” funds with less than $100 million under management, Bloomberg says, because — for example — almost all of the new money entering hedge funds in the second quarter went to the big boys with $500 million or more. At the end of June, about half of all hedge funds controlled less than $100 million and accounted for a meager 1.7 percent of the total industry assets, Bloomberg said, citing data from Hedge Fund Research. Weath stratification — it happens even in the hedge fund industry!
Meanwhile, MarketWatch is saying that new hedge funds are having trouble wooing investors, and so the glad-handing and butt-kissing at Morgan Stanley’s capital introduction conference should be on the upswing this week. Get the money if you can, boys!