The $1 trillion hedge fund industry is poised for a period of consolidation and slowed growth over the next three years as waning performance and large inflows will drive down fees, accounting firm KPMG and U.K. think tank Create said on Monday, reports.

Merger and acquisition activity will heat up among hedge funds within the next three years, the study showed, causing the industry to shrink. In addition, poor-performing hedge funds will be forced to shut down their operations.

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