Madison Street Capital has released a report that is sure to capture the attention of anyone involved with the hedge fund industry. Hedge Week has published an article that covers a few highlights of the content of the article. Things were a bit shaky in 2015. Hedge funds did not do anywhere near as well as people wished. The analysts at Madison Street Capital do strongly believe 2016 is going to be a banner year for hedge funds.
In addition to Hedge Week, PR.com has summarized the report. Reading the highlights of both published sources is worthwhile for anyone hoping to gain insight into where hedge funds may possible go in 2016.
The report notes that 42 hedge fund deals where either announced or outright closed in 2015. This was an increase over the figures in 2014. The fourth quarter of 2015 saw the bulk of the activity. The increase in action at the end of 2015 is one reason why those at Madison Street Capital feel 2016 is going to go so well.
Currently, assets in the hedge fund industry have reached stratospheric highs. All of this occurred, as the report indicates, despite the fact that hedge funds did (mostly) poorly in 2015. The strategies faltered, and the hedge fund industry’s weak performance reflects as much. A very positive outcome has emerged from the troubles of 2015. Sometimes, very poor business performances do lead to managers taking different directions.
Hedge fund managers are making changes for strategic reasons. There are simply scores of factors emerging such as increased liabilities and the difficulty in raising capital. Operational costs have not decreased, and added costs cut into profits. Hedge funds are not of much value unless they deliver profits. Managers know investors expect to see growth in hedge fund performance. The “strategic alternatives” hedge fund managers are planning are clearly designed to improve performance and returns.
Madison Street Capital feels new approaches that go are a bit different from traditional merger and acquisition strategies the industry commonly follow. The variety of “deal mechanisms” being developed could take hedge funds into a positive direction for 2016. The ensuing months will reveal whether or not these new strategies emerging lead to a productive 2016.
The report issued by Madison Street Capital carries an enormous amount of weight. The Chicago firm has been a major player in the world of investments and finance for quite some time. Advising on mergers and acquisitions are a major part of the company’s duties. Madison Street Capital also advises and manages hedge funds. The professionals at Madison Street Capital are definitely qualified to produce the informative report.
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