NEW YORK—The hedge fund industry can expect more consolidation, as the shooting star funds launched in the early part of the decade begin to burn out, according to David Smith, chief investment director at London-based fund-of-fund manager GAM.  

Tracing the industry’s history through its formative years in the 1970s, its awkward adolescence in the 80s and “extraordinary” growth spurt in the 90s, by the new millennium, Smith said, “Everyone suddenly wanted total return.”

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