Even as tight credit and a turbulent stock market have driven a number of hedge funds out of business, financial services firms Lehman Brothers Inc. and Aladdin Capital are looking ahead to better times, raising $3 billion apiece to back small hedge fund managers.
Continue reading below
Dow Jones' Financial News
reports:
Lehman Brothers aims to raise $3 billion to $5 billion for a fund to buy strategic minority stakes in hedge-fund managers, according to sources at the bank. The fund, which has been called Omega, plans to invest in up to 12 hedge-fund managers. ... Amin Aladin, founder and chief executive of Aladdin Capital, which last month sold a 19.5% stake to Japanese conglomerate Mitsubishi Corp. for $39 million, said: "The hedge-fund industry is going through an upheaval, but in another six to eight months we should be able to see the light at the end of the tunnel."
The credit crunch has hit hedge funds particularly hard, shuttering a score of fixed-income funds and severely dampening the ability of many to attract new investors. In the first quarter of 2008, investors put $16.4 billion with hedge funds, according to Hedge Fund Research Inc., the smallest inflow since the end of 2005, and roughly half the $30.4 billion they added in the fourth quarter of 2007. - George White
See Dow Jones story
