Chicago-based Madison Street Capital is one investment firm that has a firm grip on reality, according to Chief Operating Officer, Tony Marsala. Madison Street Capital specializes in mergers and acquisitions, but the firm has a very active hedge fund. Madison Street Capital investors have faith in Chief Executive Officer, Charles Botchway and COO, Tony Marsala when it comes to picking assets that produce better than average returns. Many hedge funds are closing because the investment industry is going through a transition.
But Madison Street Capital is looking forward to another good year in terms of hedge fund returns. The Madison Street Capital hedge fund performed better than expected in 2015, and Marsala thinks 2016 will be another good year.
Hedge fund managers are known for placing big bets, and receiving big fees. But returns on those big bets have decreased over the past two years, and that has forced many hedge funds to shut down, according to a report published by Barclays. This is the first year since the 2008 market collapse that fewer hedge fund managers will participate in the hedge fund market. More hedge fund managers realize that the investment market is unstable, and even the slightest change could destroy the profits of assets.
According to Hedge Fund Research, there are more than 10,000 hedge funds around the world. A Barclays report shows that number will drop by more than 300 in 2016. That is a 4 percent decline from last year. In 2009, the number of hedge funds shrank by 4 percent, and in 2008 the number dropped by 11 percent. Based on the Hedge Fund Research report, more hedge fund managers will stop managing, and they will find other sources of income. There are many hedge fund managers that are not meeting investor expectations, so there is a chance that the number of failed hedge funds will continue to grow in 2017. That’s a big change from the 2 to 3 percent growth in hedge funds between 2010 and 2015.
Two former executives from the old Soros Fund are venturing into the hedge fund industry with a fund called Castle Hook. Another retired hedge fund manager, Ken Brody, is launching Sutton Square Partners. Brody was one of the co-founders of Taconic Capital Advisors.
Even though the hedge fund market is changing, Madison Street Capital’s hedge fund is still in a good position to produce decent returns in 2016. Nothing is certain in the investment industry, but Botchway and Marsala investors believe in Madison Street’s proven track record.
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— Madison Street Cap (@MadStCap) August 1, 2016