Forty two hedge fund deals were closed at Madison Street Capital in 2015 exceeding the thirty two transactions of the previous year. The transaction volumes recorded in 2015 were approximately 27% higher than those recorded in 2014 as measured by AUM. Driven by the wave of transactions in the fourth quarter of 2015, there are other main drivers creating momentum, making 2016 to be a record year in relation to hedge fund mergers and acquisition transactions.
The report indicates that despite the mediocre performance of most hedge fund strategies in 2015, hedge fund industry assets are an all time high. Due to the lagging performance of the hedge fund, institutional investors are making allocations to the alternative asset management sector with the aim of making higher returns in order to keep up with the rising liabilities. The struggle of small hedge fund managers to attract capital has led them to operating below optimal portfolio capacity levels. Generally, managers are incurring higher operational costs while still experiencing downward pressure on the fees. As a result, hedge fund managers for both large and small hedge funds are therefore considering strategic alternatives.
Madison Street Capital is a leading international investment banking firm that provides an integrated approach to strategic and financial advisory. They help clients to succeed in the global market by providing corporate financial advisory services, mergers and acquisitions expertise as well as financial opinions and evaluations. They deal with both public and private held organizations. The company has experienced financial experts that give advice to hedge fund managers and other asset managers on issues relating to mergers and acquisitions, capital introduction, portfolio evaluation, financial restructuring as well as financial sponsor coverage.
The company has offices located in Asia, Africa and North America. All the offices are equipped with highly qualified professionals who are dedicated to delivering the best quality service. The firm carefully examines each client’s situation before developing strategies and giving guidance on decision to be made. They are well endowed when it comes to helping clients set up appropriate money management structures or setting up suitable financial structures. Madison Street Capital has many years of experience in this industry. Madison Street capital recently released the fourth edition of its hedge fund industry mergers and acquisitions review which covered transaction activity and mergers and acquisition opportunities. According to the senior managing director at Madison, Karl D’Cunha, the deal environment for hedge fund industry is set to be stronger in 2016 with a variety of deal mechanisms being used to accommodate buyers and sellers in the industry. Other than traditional mergers and acquisitions, transactions are being structured as incubator deals, revenue share stakes, PE stakes and PE bolt among others.
You can like them on Facebook.
Source: Hedge fund industry M&A overview