U.S. Hedge Funds Should Focus on Retail

February 21, 2012 Debbie Jacobs In the News

U.S. hedge funds struggling to promote their businesses are considering developing products for other sectors, like retail.

Daniel Celeghin of Casey Quirk said “Globally, institutional capital invested in hedge funds and funds of funds represents about $1.1 trillion. However, in the retail world, the amount in hedge funds is very s small.

“Of the $11 trillion in the U.S. retail funds market, only about $100 billion is in alternative 40 Act funds. While there is still growth potential in the institutional space, tremendous growth potential exists in the retail space,” he said.

He explained that the excessive focus on the more established sector is having a negative impact on the hedge fund market. Trade execution is hampered, while the risk of government authorities worrying about the market structure and its effect on investor protections.

“In the independent registered investment advisory world, tremendous demand exists for alternative-like product. Many long-only firms are creating mediocre quasi-alternative products that are not truly long/short. Hedge funds should be filling this need, but few are,” Celeghin said.

Casey Quirk, Daniel Celeghin, Economy, Hedge Fund Industry, Retail,

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