A new report from Grant Thornton, entitled ‘The future of growth and the asset management industry: Disruptive forces rewrite the solution for hedge fund success’, finds that investors are demanding that hedge fund managers find alpha that exceeds market performance, an increasingly challenging hurdle during an eight-year bull market.
However, the report says that all bets are not off yet for the hedge fund industry. “Political and economic surprises create heightened volatility, and we are most certainly living in unpredictable times. The industry attracts the best and the brightest talent who can build the most sophisticated risk, liquidity and return models that investors expect.
“Scope and scale matter; the one category of funds that experienced net asset inflows in 2016 were funds over USD1 billion in assets under management. As the industry consolidates for scope and scale, the breadth and depth of investment offerings will increase. Investors will continue to look to diversify risks for their overall portfolios, and hedge fund leaders will be there to serve.”
