In a report by investment firm Madison Street Capital, LLC, in 2014, there were 32 hedge fund agreements transacted globally. The following year, produced 42 hedge fund agreements that were closed. According to AUM, there was a 27% increase in the volume of transactions closed in 2015 versus 2014. A thorough analysis of 4th quarter deals alone projects high prospects of increased hedge fund deal closure in 2016.
In contrast to the lackluster execution of methods and strategic planning in terms of hedge fund negotiations, 2015 displayed a high retention of assets according to the report by Madison Street Capital. Although the observation of hedge fund statistics showed stagnation, investors decidedly moved monetary assets into the hedge fund industry at an accelerated rate.
While Madison Street Capital’s report did highlight an increase in assets, the report also brings attention to the poor operation of small hedge fund investment firms and individual executives. The latter revealed difficulty attracting new clients, in addition to mounting overhead costs. Madison Street Capital’s Senior Managerial Director, Karl D’Cunha, said this about the matter, “The deal environment for the hedge fund industry was strong in 2015 and will be even stronger in 2016. Structurally, we are seeing a variety of deal mechanisms being used to accommodate both buyers and sellers. Aside from traditional M&A, transactions are being structured as seed or incubator deals, revenue-share stakes, PE stakes, PE bolt-ons, etc. The highly fragmented hedge fund industry will continue to see consolidation, especially opportunistic partnerships that bridge distribution to product offering.” The report can be found on PR.com.
Madison Street Capital is a Chicago based investment firm which provides financial consulting and technical reporting of business trends observed in the industry. Established in 2005, the company provides advisement on bankruptcy, merger and acquisition deals, company buy outs, reorganization, and assets valuation. Although based in Chicago, the company offers their financial advisory services internationally and their clients include Fiber Science, Inc., and Central Iowa Energy, LLC. Madison Street Capital reputation of providing sound investment advice and detailed technical reports on business trends make the company an appealing choice for industry executives requiring directional council.
Connect with Madison Street Capital on LinkedIn.