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Komfie Manalo, Opalesque Asia:

The hedge funds industry needs to shrink by probably 65 or 70% of its current size simply because there are just too many managers out there who should not be in the industry in the first place, said Pratik Sharma, Founder and Managing Director at Atyant Capital.

Speaking during the latest Opalesque 2017 Miami Roundtable, Sharma stated, "I do think that the industry needs to shrink by probably 65% or 70%. I think too many people who shouldn’t be in hedge funds are in hedge funds; there are a lot of managers out there who are not really differentiating themselves, who don’t provide real value."

He continued, "I think this is a function of the environment that we’re in. Just think about what happened after ’08 when you saw those prop desks spinning out and saying, 'Okay, let’s start a hedge fund. My clients have been buying from me for the past 20 years. They’ll seed us with $150 million.’ Just statistically, it’s impossible for that many people to provide outperformance. It is just not possible."

Some pension funds should not allocate to hedge funds

Because of the need for large investment to achieve the scale of returns, some of the largest allocators, including the near-trillion dollar pension funds, should not have a hedge fund portfolio, Sharma said.

But also smaller organizations wil......................

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