In banking, the big are getting smaller – at least they’re trying to. In the hedge fund world, it’s the exact opposite. The biggest firms continue to dominate and steal market share from smaller startups that often fail to fully get off the ground.
The latest list of the world’s largest hedge funds offers no surprises. Connecticut’s Bridgewater Associates led the industry yet again with $87.1 billion under management, up nearly 5% from last year. J.P. Morgan Asset Management, owner of multi-strategy fund Highbridge Capital Management, came in a distinct second for the fourth year in a row with $59 billion in assets. The rest of the top five includes veteran firms Brevan Howard Asset Management, Och-Ziff Capital Management Group and BlueCrest Capital Management.
The real headliner of the research isn’t the names, but rather the level of fundraising success these firms have compared to smaller rivals that dedicate more time to the practice. Combined assets under management at the world’s 100 largest hedge funds grew by 14% over the last year, which is a massive number considering many of the firms aren’t even accepting new clients. Over the last two years, top 100 firms saw assets under management grow by 25%.
Before the crisis, fresh hedge fund startups with big-name backers used to recruit money with ease. Now, investors seem happy to leave their assets with established firms, often with more conservative approaches.
As such, new hedge funds are struggling to get out of the starting gate. Despite great market conditions, more than 900 hedge funds closed last year, the most since 2009. Launches are down too, with just 1,060 firms opening their doors in 2013, the least since 2010.
The big are indeed getting bigger. The small, meanwhile, are folding.
Losing Popularity Contest (eFinancialCareers)
Canadian banks appear to be facing an uphill battle when it comes to recruitment. Local business graduates are becoming less and less interested in working for the country’s largest banks.
In and Out (WSJ)
Morgan Stanley’s shareholders’ meeting was a bit more routine than that of Barclays or Credit Suisse. They approved the bank’s executive compensation plan, then asked no questions. It was the shortest meeting since the financial crisis.
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Lofty Fine (Bloomberg)
BNP Paribas is negotiating a settlement with prosecutors that could see the bank pay as much as a $3.5 billion fine for its dealings with sanctioned countries.
New Look at Barclays (Reuters)
Barclays has hired former Goldman Sachs exec Tom Vandever as its new mergers and acquisitions head for its Americas financial institutions practice. The post-Lehman Brothers era has begun.
‘Call Me’ (Financial News)
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Star Leaving Goldman (WSJ)
Anthony Noto, the global co-head of Goldman Sachs’ technology, media and telecom group who was instrumental in landing Twitter’s IPO, is leaving for a role on the buy-side. He’s set to join Coatue Management as a senior managing director.
Buzz Around the Office
Bottled, Please (NY Post)
Cocaine use has become so prevalent in England that it can be found in treated tap water.
Quote of the Day: “New York City is a mismanaged carnival of stupidity that is desperate for revenue and anxious to criminalize behavior once thought benign.” – a tweet from actor Alec Baldwin following his arrest for biking the wrong way down Fifth Avenue