Investment banks eye hedge funds
A number of investment banks were said to be eyeing the launch of hedge funds. Retail investors with at least US$1,000 would benefit from the funds. The launch happened due to the earnings of Goldman Sachs fund in May. The said hedge funds raised US$58 million in not more than two months.
According to Amy Bensted, Preqin's head of hedge fund research, Goldman pioneered the multi-manager hedge fund for the retail market. She added that other major banks were also planning to give the same offerings. Preqin was an alternative asset data provider.
Due to clients' decreasing dependence on wealth managers, banks like Merrill Lynch and UBS were already considering hedge funds. The alternative investment solutions provided by the said banks diminished its appeal to people.
"A lot of institutional money is flowing from, say, a Credit Suisse fund to a Bridgewater fund," Bensted stated. "There has been a move from relying on wealth managers or investment banks to pure asset management shops - so for investment banks, they need to get these smaller investors in and are trying to get them used to hedge fund investing."