Madison Street Capital, LLC is one of the few leading investment banks if the sector of financial services. The firm recently made a release of its fourth edition of its hedge fund industry overview of M&A. In 2015 alone, around 42 deals of hedge funds were announced or successfully closed. This information is according to the reports provided by Madison Street Capital, LLC, which indicates that there was an excess of 32 deals that were closed in 2014.
Comparing the transaction volumes of 2014 and 2014, it is visibly evident that in 2015 they were higher by about 27%. This discovery is in accordance with the AUM’s measurements. 2016 is the year, which is well positioned to see record breaking of M&A transactions regarding the hedge funds. Some additional drivers, which have increased this deal’s momentum in addition to operational wave, which was responsible for this growth in the fourth quarter of 2014, will foster the growth.
Notwithstanding the second-rate performance throughout most of the hedge fund’s strategies in the year 2015, the assets in the hedge fund sector are usually high at all time. Most importantly, institutional investors are continuing the essential allocations to the asset management field. This move will ideally serve as an alternative in the sector. These institutional investors are doing so with the sole aim of achieving higher returns, which will match the rising liabilities. All these endeavors come at a time when the hedge fund’s performance dawdled.
Smaller hedge fund managers are struggling in their quest to attract increased, new capital. Intrinsically, these efforts have made the smaller hedge funds to operate below stellar portfolio capacity. Managers have continued to face downward fee pressure. Concurrently, managers continue to incur overrated operation costs. Such adverse factors have pushed small hedge fund managers to look for strategic alternatives.
Karl D’Cunha serves at Madison Street Capital, LLC as the Senior-Managing Director, and he made positive statements, which show 2016 to be a good year in the hedge funds industry. In 2015, according to Karl, there was a high deal environment for the hedge funds. Optimistically, he continued to state that 2016 would be stronger and see more deals closed in comparison to 2015. Various deal mechanisms are being integrated in order to accommodate both the sellers and buyers.
Such deal mechanisms include the structuring of transactions as revenue-share stakes, PE stakes, and incubator deals or as seed, and PE bolt-ons among several others. In Karl’s prediction, there will be consolidations in the largely fragmented hedge fund sector. The full review of the hedge funds industry from Madison is available on PR.com.
Madison Street Capital, LLC has its headquarters in Chicago, Illinois, and it is a leading firm in the investment-banking sector. As the leader in the provision of financial services, Madison Street Capital, LLC provides reliable financial advisory to other enterprises as well as consulting and M&A advisory services to hedge funds. The company utilizes a team of expertly trained and adept professionals, which advises asset managers on financial sponsor coverage, capital introduction, financial restructuring as well as portfolio valuation.