Business Week – Buying FrontPoint is just one step in a push to modernize its entire business, says the company’s head of alternative investments.
Amid the rapid growth of hedge fundsâ€â€assets under management have increased 21% this year, to $1.3 trillion, according to Hedge Fund Researchâ€â€big Wall Street banks are jockeying for a piece of this steadily expanding sector (see BusinessWeek.com, 10/13/06, “What’s Driving the Hedge Fund Boom?”). On Oct. 31, Morgan Stanley (MS) announced that it’s buying the hedge fund FrontPoint Partners. Just one day earlier, the investment bank announced plans to enter a strategic alliance with another hedge fund, Avenue Capital Group.
The deals were the result of efforts that had been in the works for several months at Morgan Stanley. And according to the firm’s Head of Alternative Investments, Stuart Bohart, they’re part of an effort to “evolve” its asset management business by bringing new managers and new fund products to the Morgan Stanley stable. And there will likely be more hedge-fund deals in the future.
