With assets so vastly depleted, many hedge funds are likely to merge, an asset management executive told a recent gathering of hedge fund executives at the SkyBridge Alternatives Conference.

“We’re going to see a massive wave of consolidation across the entire asset management industry over the next 12 to 24 months,” said Brian Reilly, head of asset management investment banking at Barclays Capital.

Besides wanting to increase assets, hedge funds will look to round out their offerings with funds that invest in other parts of the world or in other markets, Reilly said.

Deals over the past year have been described as “rationalization” rather than strategic mergers, Reilly said. One of the deals that Barclays is currently working on, Reilly continued, “could be a huge event” for the money management industry.

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