The material on this site is for financial institutions, professional investors and their professional advisers. It is for information only. Please read our Terms & Conditions, Privacy Policy and Cookies before using this site. Please see our Subscription Terms and Conditions.


All material subject to strictly enforced copyright laws. © 2022 Euromoney, a part of the Euromoney Institutional Investor PLC.
CAPITAL MARKETS

Investment management: More consolidation could encourage convergence

The sixth annual report on global investment management by KPMG has revealed that further convergence between hedge funds, private equity companies and long-only managers is to be expected.

The report, released in November, was compiled from a survey of three sets of key players: long-only and alternative investment managers; pension funds; and administrators of long-only and alternative investments. Their responses have revealed three key trends.

The first is the convergence between long-only and alternative investments, as more participants in each are adopting the techniques of the other. Secondly, that between alternative investments themselves, with private equity managers and hedge funds becoming more closely aligned. Lastly, the convergence within asset classes, such as when a fund expands its portfolio into new regional markets. "Up to now, convergence has been tactical," says Jon Mills, a partner at KPMG. "Now it’s more about strategic measures."

Convergence, according to the report, is mainly being driven by the increased demand of clients for absolute returns, causing investment managers to look for new areas to find them. As hedge funds and private equity firms seek these returns with aggressive, more diversified investments, long-only managers have been forced to find ways to replicate those returns. Another driver for convergence by long-only managers is the need to retain talent. More and more hedge fund managers have come from long-only investors, and the balance is not being redressed.

You have reached premium content. Please log in to continue reading.

Read beyond the headlines with Euromoney

For over 50 years, our readers have looked to Euromoney to stay informed about the issues that matter in the international banking and financial markets. Find out more about our different levels of access below.

SUBSCRIBE ONLINE TODAY

Unlimited access to Euromoney.com and Asiamoney.com

Expert comment, long reads and in-depth analysis interviews with senior finance professionals

Access the results of our market-leading annual surveys across core financial services

Access the results of our annual awards, including the world-renowned Awards for Excellence

Your print copy of Euromoney magazine delivered monthly

£73.75 per month

Billed Annually

FREE 7 DAY TRIAL

Unlimited access to Euromoney.com and Asiamoney.com, including our top stories, long reads, expert analysis, and the results of our annual surveys and awards

Sign up to any of our newsletters, curated by our editors

LOGIN NOW

Already a user?

We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree