New Putnam Lovell report: alternative managers one-third of all asset management M&A in
|Feb 27th, 2007 | Filed under: Hedge Fund Industry Trends | By: Alpha Male||
According to a study released today by investment bank Putnam Lovell NBF, alternative asset managers represented nearly one-third of all acquisitions in the asset management industry in 2006 (59 transactions totaling $175 billion). In part, the firm chalks this record number up to increased demand for absolute return products:
“Demand for absolute return continues to rise: institutional investors seek all-weather portfolios that can guarantee long-term payment obligations to retiring Baby Boomers, who in turn want products and packages that create a constant stream of retirement income. This shift has created equal opportunities for both fund managers who can provide the necessary market outperformance and investment banks with hedging instruments that can sponge away associated risk.”
Meanwhile, the firm has a warning for traditional long-only managers: innovate or die. With so much of the asset management industry built on a foundation of index-hugging, “aggressive product development” is now a must:
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