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Alternative Market Briefing

Hedge funds seek to streamline overhead as assets (and management fees) decrease spurring business at `hedge fund hotels`

Wednesday, April 15, 2009

From Kirsten Bischoff, Opalesque New York:

Falling rents in hedge fund centers may paint a dismal picture for the industry, but the fact is many firms are simply streamlining, and re-evaluating overhead costs in the wake of diminished assets under management and a subsequent decline in management fees. Another factor in falling rents is firms in launch phase focusing resources on developing strategies and the operational systems required to secure the investor capital being allocated, leaving little room for stretching budgets to acquire expensive offices.

“We have had several enquiries in the last few weeks about people exiting the larger organizations and thinking of starting their own shop,” Sarah Barham of Toronto’s Hedge Fund Hotel (www.hfhto.com) told Opalesque. The business center offers office space and services to hedge funds and those firms serving the hedge fund industry covering everything from telephone and secretarial support to marketing services and presentation skill training.

The Hotel attributes its growth (recently expanding to 11,000 sq feet of office and conference space) to Canadian hedge fund clients that have grown in assets and/or performance through the global financial crisis. “During these tumultuous economic times, managers within the Hedge Fund Hotel and many other Canadian funds, are proving to be stellar performers,” the ......................

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