As the world of alternative investments gets turned on its head this year, the industry is facing pressures it hasn’t experienced in years. Hedge fund managers are looking at ways to continue evaluating opportunities and launch products within the constraints of lower revenues and severe cost pressures.
One strategy alternative funds are turning to is outsourcing investment research processes, including equity, fixed income and derivatives research and analysis, which is gaining increased acceptance with fund managers.
The number of hedge funds shrank in 2008 and overall performance is down 18% year-to-date, according to published reports. Many funds are lowering fees, halting redemptions, and some are cutting staff. For funds to manage costs going forward, all options are on the table.
