Managers: Twin Peaks for HFs, PE

Date: Monday, October 1, 2007
Author: Hedge Fund Daily

Hedge funds and private equity have reached a peak in their cycles after years of growth, and both industries are poised for a thinning out of the herd as “mediocre people” get wiped out and “good people” go on, Anthony Bolton¸ a star fund manager at Fidelity International said late last week at a Reuters’ forum. After record inflows in recent years, the $2 trillion hedge fund industry was hit hard over the summer by equity and credit market turmoil. “There’s bound to be some backlash,” said Helena Morrissey, CEO of Newton Investment Management. “A huge amount of money has gone into some assets, and people will question that.” In the private equity market, large-scale corporate buyouts had become increasingly common in the past several years. However, they have all but dried up during the credit crisis, noted Charles Sherwood, a partner at Permira. “As the credit market currently stands, the large leveraged buyout market in the Western world does not exist today,” he said.