Many independent hedge fund operations won't stay independent for long, a new survey suggests.
If that becomes the case, hedge fund employees could fall within Wall Street's standard hierarchy of titles, career paths and compensation structures.
A survey by private wealth research firm Prince & Associates, reported in Monday's Wall Street Journal, found that two out of three hedge fund company owners expect to see more fund firms get acquired by big banks and brokerages over the next three years. The survey covered 301 U.S. hedge-fund firms with at least $100 million under management and in business for five years or longer.
A separate survey cited by the WSJ indicates that hedge fund leaders are upbeat about their business prospects, notwithstanding recent turmoil that's afflicted fixed-income markets and forced the shutdown of a handful of hedge funds. Indeed, fund partners generally seem to feel that volatile markets will help them increase assets and customers. This flies in the face of some media reports that the hedge fund sector's appeal has been dimmed by widely reported disasters at a handful of funds, and losses last month at many high-profile funds.
Of 197 hedge fund partners who answered the second survey, 49 percent said the increased market volatility would help their business, and only 12 percent said it would hurt. Moreover, the proportion that expect difficulty attracting assets from high-net worth investors plunged to 14 percent, from 77 percent in a previous survey. At the same time, however, almost half the respondents expect to have more trouble gaining business from institutional investors.