"We are very pleased to announce that on July 9, 2009, XYZ Associates and 123 Management entered in to an agreement under which 123 Management will take over the investment management duties....
"...We believe that this combination will greatly bolster our capabilities as we will be able to perform some functions in house, such as Operational Due Diligence, which were previously run through an outsourced service provider."
A positive sign within the industry that demonstrates certain benefits of hedge fund (in this case fund of funds) consolidation. The seller recognizes the need to provide additional services to investors in order to remain competitive and hold on to investors/assets.
There remains a large amount of smaller (and mid size) firms that have outsourced compliance, legal, technology, marketing and even trading execution in order to save costs and infrastructure.
Clearly, the above example of consolidation and rationalization will be beneficial and help the industry emerge stronger.
Wednesday, August 5, 2009
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