NEW YORK (HedgeWorld.com)–Fund of funds firm Ivy Asset Management has topped US$15 billion in assets, growing to that level from US$2.4 billion four years ago, when it was acquired by the Bank of New York.
That alliance formed in the summer of 2000 was the first major maneuver in what has become a strong trend of mergers and acquisitions in the industry. The result so far appears to augur well for hedge fund businesses that operate as part of a large financial company (see ).
The firm’s experience reflects changes in the industry as a whole, said Ivy Managing Director Sean Simon, speaking at a press conference. He emphasized that the industry has become more global and that the preponderance of assets now comes from institutions rather than high-net-worth investors. Ivy recently opened up an office in Tokyo.
But even at US$1 trillion of assets, hedge funds are a small part of total institutional capital, he said. Mr. Simon does not regard the money inflow as the main cause of lackluster hedge fund returns this year, attributing the dip mostly to market conditions, in particular low interest rates and a lack of volatility.
“If you have the right managers, you will meet your return target over long-term cycles,” he said. Ivy is meeting its return targets this year. Mr. Simon does not expect hedge fund performance in 2005 to be much different from the 2004 experience, but it depends on what happens to volatility and interest rates.
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