Hedge Fund Reader : KPMG predict Hedge Funds downturn

Comments

October 13, 2005

KPMG predict Hedge Funds downturn

KPMG International conducted survey with a focus on New Zealand inputs on Hedge Funds. The study stated that performance of the hedge funds is highly variable. They are incapable of generating the high double digit returns due to which they have lured the investors into investing into them. The trend has changed drastically, they carry a big risk of generating poor returns; are incompetent at the administration end, and there exists mis-pricing of complex products. The survey also forecasts that the next growth phase of hedge funds will be fuelled by pension funds. They are the major perpetrators of hedge funds; they would be the one who would bring down the high charges and fees charged by these funds. The study also points out that the hedge funds industry will consolidate over the next three years because of a wide margin of under-utilized capacity, at the manufacturing, distribution, and administration end. The study finally concludes that till 2020, the hedge funds will be lucrative enough for investors, although the fund managers have to constantly keep re-inventing themselves, to keep the industry at a top investment destination stop. The National Business Review Reports:

Indeed, the study found that hedge fund managers and mainstream fund managers are already diversifying into one another’s product areas, using similar investment strategies and boutique structures that overtly separate high and low return products. Hedge funds are, thus, no longer the only means of achieving high absolute returns in today’s low volatility environment.

--
Did you enjoy this post?

October 13, 2005 in Research | Permalink