Among the leading universal investment banks in the industry of financial services is Madison Street Capital, LLC. This financial services providing firm released its fourth edition of M&A overview in its hedge fund industry. Forty-two hedge fund deals were announced or closed globally in 2015. This report is according to Madison Street Capital, LLC, which shows an excess in the thirty-two closed in the year 2014.
Additionally, the transaction volume of 2015 was about 27% higher compared to that of 2014 as per the measurements of the AUM. The year 2016 is positioned as the year of making a record of M&A transactions of the hedge fund.
Despite the mediocre performance across the strategies of most hedge funds in 2015, the hedge fund industry assets are high at all times. Increasingly, institutional investors are making the necessary allocations to asset management sector, which is an alternative. They do this with the hopes and aims of achieving and making higher returns to match with the rising liabilities. All these endeavors are at the times when the hedge fund performance lagged.
Managers of smaller hedge funds are experiencing struggles in their quests of attracting new and more capital. Adversely, these struggles have led to the smaller hedge funds operating below the optimum levels of the portfolio capacity. Managers are facing downward pressure on fees. These factors among others have led to all sizes of hedge fund managers to consider strategical alternatives.
The Senior-Managing Director at Madison Street Capital, LLC, Karl D’Cunha, made several statements all portraying 2016 as a stronger year for the hedge funds. According to Karl, in 2015, the deal environment for hedge funds was high. He optimistically stated that 2016 would be even stronger compared to 2015. He said that in an attempt to accommodate both sellers and buyers, various deal mechanisms are being incorporated.
Transactions are being structured as incubator deals or as seed, PE stakes, PE bolt-ons, and revenue-share stakes among others. Notably, this is aside from the traditional M&A. Karl also predicts consolidations in the highly fragmented hedge industry such as opportunistic partnerships which will bridge distribution to the product offering. The full review is available on PR.com.
Headquartered in Chicago, Illinois, Madison Street Capital, LLC is firm in the investment banking industry. As a financial service providing business, the company offers financial advisory to other companies and M&A advisory and consulting services to the hedge funds. The firm also has financial industry specialists that advise asset managers on capital introduction, portfolio valuation, financial sponsor coverage, and financial restructuring. For more insights on the firm, visit their website at http://madisonstreetcapital.org/.