Market participants point out, however, that the increasing number of failures is a result of higher costs and fewer opportunities, rather than incompetence or fraud. Increasing regulation has put pressure on smaller managers that cannot afford the extra staff or administrative tools required to be compliant. At the same time interest from institutional investors is increasing. The growing client base is more willing to invest with managers that have larger operations.
Although liquidations are increasing in number, the number of managers is also growing.
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