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CNN Money – Money managers must offer new portfolios and keep cutting costs to survive in an era where frightened investors prefer safer fixed-income funds to stock and hedge funds, a report released Monday showed.
Badly bruised by last year’s financial crisis when tumbling markets and investor redemptions shrank global assets 18 percent to $48.6 trillion, asset managers face more tough times in 2009 and the years ahead, The Boston Consulting Group wrote in its seventh annual asset management industry survey.
Profits will shrivel again, likely falling to 30 percent or less this year from 34 percent at the end of 2008 and 38 percent at the end of 2007, the consultants forecast.
Reuters – Global assets of hedge funds may drop to $1.2 trillion by the end of the first quarter, down 35 percent from 2007 as the number of managers decline and funds rely less on strategies that use leverage, a UBS executive said on Tuesday.
"We are gonna see a reduction in hedge fund assets, we are gonna see decline in the number of hedge funds, we are gonna see some strategies that will not work in this environment," Timothy Bell, global head of hedge funds advisory at UBS Wealth Management, told reporters in Singapore.
Hedge funds had assets worth $1.9 trillion at the end of 2007, which peaked at $1.93 trillion in the middle of 2008, according to data from Chicago-based Hedge Fund Research. These assets dropped to $1.4 trillion at the end of 2008.
Bloomberg – Hedge-fund assets will likely drop by about $192 billion this quarter after the industry posted record losses in 2008, according to estimates by UBS AG.
Global assets will likely fall to $1.215 trillion in the first quarter, said Timothy Bell, London-based head of hedge- funds advisory at UBS’s wealth management unit. Hedge-fund investors withdrew a record $152 billion in the fourth quarter, pushing industry assets to $1.407 trillion at the end of 2008, according to Hedge Fund Research Inc.
“That trend is going to keep going certainly till the end of this first quarter,” Bell told reporters in Singapore today. “Trust will be reestablished by mid-year, provided the hedge fund industry does what it’s meant to do; January was a shining example of the lack of correlation.”
