Hedge Funds

Study suggests poor performance may spur consolidation


Relatively poor performance for hedge funds this year may spur further consolidation in the industry. That's according to a study by the Edhec business school, which found in its research that bigger firms were looking at acquiring smaller shops to gain capacity and achieve economies of scale aimed at maximizing business efficiencies.

Edhec's study suggested that weaker hedge fund performance was broadly putting downward pressures on fees for trading shops this year. The report drew the conclusion that it was this combination of fee pressure, stemming from lower returns, driving firms to seek business efficiencies through consolidation. Such efficiencies