Banks create corporate finance hotline to hedge funds

Do hedge funds need strategic advice from investment bankers? And do banks need to set up new departments to offer it? Yes, reckon UBS and CSFB; no, say many of their competitors. Antony Currie reports on whether treating hedge funds like other corporate or private-equity clients is the latest development in the industry or just a fancy bit of spin.

THE HEDGE FUND head has been pondering his choices. Should he diversify his portfolio? Should he really make use of that new illiquid product that appears to promise better returns than the usual strategies? Should he sell out to a bank?

Rather than merely relying on his computer models and his traders for thoughts, he has also decided to call up his investment bankers, the specialist corporate financiers that know his industry so well.

That, at least, is the future as seen by UBS, which in July set up its alternative capital group.

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