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Opalesque Exclusive - GAIM Update : Why is everyone into buying hedge funds, Will the IPO trend continue? From Benedicte Gravrand, ‘live’ from GAIM, Monao: A distinguished panel started the day by discussing the most successful business models for the sustainable alternative asset management business of the future. It included Daniel Shapiro (Schulte Roth & Zabel Int’l), Howard Berkowitz (Blackrock), Jonathan Polin (Resolution Asset Management), Kevin Pakenham (Putnam Lovell NBK) and Randy Yanker (Alternative Asset Managers).

Why is there such an urge from investment banks and the like to acquire investment management groups? It’s a very good investment, a new asset class, and returns are likely to continue to grow strong. The banks can help develop the existing investment base and thus create a successful partnership. Clients like better risk management which single managers cannot always offer. The acquirers bring in additional capital – a positive catalyst for growth. And they can plan in the long term. The talents within the investment management companies may not have business acumen, so the acquirers bring in their own expertise and help out.

However it is not always possible for banks to gain control of the acquired companies. They may have to deal with the so-called ‘elevator’ risks. And if the main players within the investment management businesses leave, the value lessens. They indeed ......................

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