Fri, Feb 23, 2018
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Alternative Market Briefing

Darwinian pressure: Even mid-sized ($500m) hedge funds consider consolidation

Thursday, August 10, 2017

Komfie Manalo, Opalesque Asia:

Asset managers are facing a very significant challenge, particularly the mid-sized managed futures hedge funds, said John Harrison, a partner and Group CFO/COO at Amplitude Capital, a systematic commodity trading advisor (CTA). The challenges are coming from pricing, fees, as well as asset raising, he said.

As a panelist in the latest Opalesque 2017 UK Roundtable, Harrison said: "Even for mid-sized companies with sizeable assets and solid track record, we do see a certain pressure to consolidate as a result of a relatively static AUM growth which, when confronted by ever increasing cost base, can cause issues. That is a business risk some managers have to look into at the moment."

He explained that the problem is particularly acute for those running assets below $500m or so. The break-even point for managers continues to increase. The irony is that Amplitude originally came exactly from this fertile ground of small energetic managers, he said and added that the company grew its business from almost nothing to a position where it is today, managing $1.6 billion across four main strategies.

Consolidation in asset management also causes issues for investors

Harrison continued, "The question we should ask is, would a similar business starting up today in London/New York be able to get through? My fear ......................

To view our full article Click here

Today's Exclusives Today's Other Voices More Exclusives
Previous Opalesque Exclusives                                  
More Other Voices
Previous Other Voices                                               
Access Alternative Market Briefing


  • Top Forwarded
  • Top Tracked
  • Top Searched
  1. Opalesque Exclusive: Global Sigma captures February's long-vol trade[more]

    Bailey McCann, Opalesque New York for New Managers: Florida-based Global Sigma rode February's volatility to new highs. The firm's AGSF strategy is up +2.8 percent through February 16 and +4.2 percent YTD a

  2. Art & Motion launches collectible car alternative investment vehicle[more]

    Komfie Manalo, Opalesque Asia: Luxembourg-based Art & Motion has launched a new investment vehicle dedicated to vintage cars and exceptional high-quality vehicles as this collectible market has grown exponentially the turn of the centu

  3. Investing - Hedge funds turn short on tech just as stock rally takes off, After biggest short, speculators slash bearish US bond bets as supply deluge looms[more]

    Hedge funds turn short on tech just as stock rally takes off From A key group of investors has just missed out on the biggest tech-stock rally since 2014. Hedge funds and other large speculators turned net short on Nasdaq 100 Index futures for the first time in 21 months, ac

  4. Low volatility funds fail to protect investors[more]

    From A number of exchange traded funds (ETFs) designed to protect investors from sharp stock market gyrations lost more money than mainstream US stocks during a sell-off this month, underperforming in precisely the conditions in which they were meant to thrive. Low volatility ETFs, lau

  5. Legal - Hedge funds fight to save M&A arbitrage strategy, Fannie Mae and Freddie Mac ruling blow to hedge funds[more]

    Hedge funds fight to save M&A arbitrage strategy From Hedge funds which use the US courts to wring higher prices for merger and acquisition deals are fighting to save the lucrative investment strategy, after a Delaware court ruling that threatens to shut it down. Verition Partner