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Quick Hits: Trimming the Hedge Funds


Brief scrutiny of today's headlines.

About a third of hedge funds will close or merge following the industry's dismal performance this year.

Bloomberg News says the $1.5 trillion industry grew to a record 10,233 funds in June. Funds dropped an average 18% through November, the worst year on record.

IGS Group will team with Grisons Peak to launch a firm that will advise hedge fund managers on mergers. The new group, Alternative Investment Management Banking, expects to offer advice on 6 to 8 transactions next year.

In general, hedge funds charge a 2% management fee and retain 20% of profits. It's a good business - but the field is crowded, and the market downdraft is likely to force a shakeout.

This will benefit investors in the long run. Along the way, there's always someone to pick up the pieces - for a fee. That sure beats begging Congress for a handout.
No positions in stocks mentioned.
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