You can fret and fume about their secrecy, about their disproportionately large cache of resources and the inappropriate income of their managers. But you cannot wish them away. Hedge funds accounted for 28% of the fund management industry’s revenues last year, according to research from Merrill Lynch – that’s up from 20% in 2005. investmentnews.com reports:
The increase in revenues is mostly due to high fees and strong sales, and fueling the interests of large investment banks in hedge fund management companies. For instance, JPMorgan Chase & Co. of New York last week bought its fifth hedge fund holding, a 20% stake in Spinnaker Capital. These numbers signal that hedge funds are not just a trend, a Merrill analyst told Financial Times.
Read more: Hedges here to stay, says Merrill analyst