IDW's Ilana Weinstein Says Hedge Fund Shakeout ‘Far From Over’

(Bloomberg) -- The hedge fund shakeout is still unfolding with “many more” closures coming, according to Ilana Weinstein, chief executive officer of IDW Group.

“This is far from over,” Weinstein said in a Bloomberg Television interview on Monday. “I don’t think it’s too dramatic to say, but we are in the midst of the equivalent of a shifting of the tectonic plates for the hedge fund industry.”

The turn began last year, she said, when firms including John Griffin’s Blue Ridge Capital, Neil Chriss’s Hutchin Hill Capital and Eric Mindich’s Eton Park Capital Management announced closures. As recently as last week, Jabre Capital Partners and River Birch Capital joined the list. As of Dec. 3, fund shutdowns this year outnumbered openings 580 to 552, according to Eurekahedge data.

“It’s not just the hedge fund closures -- it’s the size of those closures and the reputation,” said Weinstein, whose New York-based firm is a hedge fund recruiter.

Managers need to distinguish themselves in a highly competitive market, according to Weinstein, who said “a lot more” firms may exit. The long-short equity and event-driven strategies, for example, account for a big portion of the $3 trillion industry.

“The reason for that is the hedge fund industry is very crowded,” she said. “Everyone has access to the same data and we’re in the midst of what is no longer a bull market.”

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