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From Kirsten Bischoff, Opalesque New York:

As the number of hedge funds has decreased, there is an ongoing discussion of what the future of the industry holds. Overall, it (both hedge funds and the firms that support them) has been trending towards a landscape where funds are either large, multi-billion dollar entities or they are smaller $500m-$1bln entities. Cycling out of 2008, the weaknesses of both groups have been studied closely.

Larger firms have been cited as being less nimble in their ability to execute their strategies, and redemptions from what are typically fewer and larger institutional investors have shown how wildly asset levels can swing. Smaller funds on the other hand, are facing the possibility of increased infrastructure demands from both investors and expected regulation.

San Francisco-based Triatto Capital will be launching a long/short equity fund in August 2009. The fund strategy will focus on small and mid-cap companies based in the US and cover all market sectors. Opalesque caught up with Triatto founder Marcelo Desio, CFA, for some insight into launching into the current market environment.

Triatto previously managed a long/short strategy from 2004-2007, with $90m in assets invested through a fund and separate accounts. Over this time two large allocators with separate accounts had to withdraw assets (at different times) because of internal liquidity needs. Finally, in 2......................

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