More Aggressive Bank Moves Into Hedge Funds

Date: Wednesday, January 24, 2007
Author: Dailyii.com

Credit Suisse and Jefferies are planning more aggressive moves in hedge funds. According to Bloomberg News, Credit Suisse wants to take advantage of what it views as a greater emphasis on individual managers as opposed to funds of hedge funds. "We are dedicated to strengthening our single hedge fund business," David Blumer, who heads the bank’s investment management division, told investors, Bloomberg News reports. Credit Suisse says its change in strategy is based on the trend that will see assets evenly split between hedge funds and FoHFs by 2010; today, HF clients have about two-thirds of their assets in funds of hedge funds. Meanwhile, Jefferies is looking to build its HF business with several new additions. "There are a couple of engines in our asset management business, the most notable of which is our hedge fund platform," Jefferies CEO Richard Handler told Financial News. "We would like to add three or four funds a year for the next couple of years." The bank reportedly is providing the capital for the new products and giving HF managers of those funds 12 to 24 months to demonstrate their growth capacity, after which Jefferies will market the offerings to third-party investors. "In a perfect world," Handler said, "assets will grow on a compounded basis, but we need to continue to find good managers and they have to perform."