The recent release of Madison Street Capital’s 4th edition M&A overview of the hedge fund industry has given analysts an outlook of how the industry is expected to perform in 2016. The report was released in the first week of February this year. It covers global M&A opportunities, and transaction activities. In summary, the report shows that the transaction volumes in the sector increased by 27% while the performance in the industry went down. The report was released by Karl D’Cunha, the senior managing director at the international investment bank.
Madison Street Capital’s report is valued in the industry as it is detailed, non-biased and global. This year’s report showed that a total of 42 deals were closed in 2015, as opposed to only 32 deals closed in 2014. The increase in the number of closed deals, as measured by AUM, represents an increase of 27% in transaction volumes. However, it is important to note that most of these deals were closed in the last three months of 2015. This indicates that the deal momentum is expected to be stronger in 2016. This information was originally reported on PR.com as posited in the following link http://www.pr.com/press-release/657365/
From the report, analysts have been able to come up with two conclusions. First, institutional investors have noticed that traditional areas of investment in the hedge fund industry are not generating adequate returns. This way, they are allocating resources to alternative asset management sectors. This move is aimed at ensuring the firms can generate enough returns needed to keep them operational. These allocations have been made possible by the high value of assets in the industry, which are currently at an all time high.
Secondly, most hedge funds managers are operating below optimal portfolio levels due to the inability of hedge fund managers, especially smaller firms, to attract new capital. This situation has been worsened by the high pressure for lower fees currently facing the hedge fund industry. These two factors are forcing all hedge fund managers to look for strategic investment alternatives.
About Madison Street Capital
Madison Street Capital is an investment-banking firm having a global presence. The firm’s headquarters are in Chicago, Illinois. The institution provides its clients with strategic and financial advisory solutions. Unlike other investment banks, Madison Street Capital mainly deals with corporate clients. Its services include capital introduction, portfolio valuation, M&A advisory, financial sponsor coverage and financial restructuring. This information was originally published on LinkedIn as highlighted in this link https://www.linkedin.com/company/madison-street-capital-llc