According to prime brokers in New York and London, funds of hedge funds are reducing the number of new managers they are taking on their books, and, in some instances, are reducing their existing portfolios of managers. One prime broker says that some funds of hedge funds have reduced their books of managers by 10% to 20% over the past two quarters.
Vineet Kapur, co-head of North American prime brokerage capital introduction at Morgan Stanley, says his firm has noticed this trend. "We have seen funds of hedge funds decreasing the number of managers on their books, and allocating the extra money among their top existing managers," he says. Increased capacity among the largest...
