Mutual funds have been acting like hedge funds lately. More and more, mutual funds are applying hedge fund-like strategies, and some even buying out whole shops.

Hedge funds are appealing to mutual fund firms because of their history of big profits, The Wall Street Journal reports. Firms are reportedly looking to find hedge funds that match their business models.

BlackRock , Nuveen Investments and Alliance Capital Management are asset managers that currently own hedge funds. Recently, Legg Mason announced a deal having to do with going into the hedge fund business.

"I've talked to a couple of mutual fund CEOs who have expressed interest in it," said Rachel Barnard, an analyst at Chicago-based Morningstar "They say, 'If I could find the right hedge fund, we'd love to part of that industry.'"

One way that mutual funds have entered into the hedge fund industry is by creating hedge fund-like mutual funds, called hedged mutual funds. The appeal of these funds is that they give investors a wider range of investing strategies. It is also much easier for mutual funds to add hedge fund strategies to their existing products, rather than but an entirely new hedge fund company.

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