Canadians moving back into hedge funds: AIMA

Date: Friday, September 11, 2009
Author: Reuters Canada

Canadian hedge funds will emerge stronger from the global economic crisis, driven by domestic expertise in key industries like resources and energy, and as the asset class recovers internationally, a chief industry source told Reuters on Thursday.

Gary Ostoich, who took over as Canadian chairman of the Alternative Investment Management Association this week, said the crisis pummeled many hedge funds at home and abroad, bankrupting many managers but setting the foundations for a stronger industry.

"I think what 2008 resulted in was a cleansing. Managers went out of business, funds closed down, but at the end of it, it definitely is going to result in a stronger industry," said Ostoich, who is also president of Toronto-based Spartan Fund Management, with C$35 million ($32.4 million) in assets.

Ostoich, a lawyer by training, said there was already anecdotal evidence that investors were returning to hedge funds, albeit selectively.

($1=$1.08 Canadian)

(Reporting by Pav Jordan; editing by Rob Wilson)