Traditional Vs. Alternative Thing of the Past: Study

Date: Wednesday, October 25, 2006
Author: HFN Daily Report

Differentiating between traditional investment management and the hedge fund industry is passé, a TABB Group study claimed.

"Traditional asset management is dead," the study said, calling a contrast with the hedge fund space "no longer useful."

Instead, the study said, investing should be redefined among: long-only versus long-short; broad-based versus narrow; fundamental versus quantitative; and alpha-seeker versus beta-enhancer.

The study said 50% of the traditional asset management industry has entered the hedge fund business.

Seventeen percent of the long-only space that has not launched a hedge fund is planning on doing so soon, the study said.

TABB Group presented its analysis as part of a study entitled "Institutional Equity Trading in America 2006: The Return on Relationship."

The study concluded overall brokerage revenue would increase because of the movement of traditional asset management toward the hedge fund space.

As more enter the asset class, the report said, "Their need for a global, multi-asset broker" is greater.