A three-way battle for supremacy in Hedge Fund Industry 2.0
| Jun 10th, 2009 | Filed under: Hedge Fund Industry Trends, Today's Post | By: Alpha Male |
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We’ve moved from Bermuda to Boston today on our tour of places starting with the letter “B” this week.
A cradle of traditional investing civilization, Boston also has a vibrant alternative investment community. Even the long-only stalwarts are now joining the revolution. Putnam Investments for example, has recently showed some interest in alternative strategies – albeit in a decidedly traditional wrapper (see recent post). Putnam’s interest in hedge funds is matched by at least one major pension plan – laying the groundwork for a crowded industry as it emerges from the doldrums of 2008.
It’s no surprise then that Putnam CEO Robert Reynolds revealed to local university students earlier this week that he really does want to get into the alternative business. Reuters reported that Reynolds wants to “round out (his) product palette.”
We’d guess that many retail mutual investors might be kind of freaked out if they thought Putnam was turning into a hedge fund company. So perhaps to avoid alienating this critical constituency, Reynolds quickly followed that he sees this as a way to “appeal to a different market segment.”
Not a “real” hedge fund?
In a situation reminiscent of the 130/30 debate, hedge fund managers are skeptical of traditional investors’ ability to do justice to their craft. For example, one of the co-founders of UK hedge fund company GLG Pierre Lagrange, suggested to the FT last week that hedge funds managed by mutual fund companies lack that certain je ne sais quoi that only a hedge fund could deliver. Said Lagrange: More…
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