More evidence of asset management “convergence”

Jan 21st, 2009 | Filed under: Institutional Investing, Today's Post | By:
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As we’ve observed many times on these pages, the asset management industry is quickly converging on one business model that includes both alpha and beta – both hedge funds and mutual funds (even ETFs).  Last  week brought us more evidence of this free-for-all among traditional and long-only managers.

First Putnam Investments announced the launch of its “absolute return” mutual funds.  The firm’s CEO issued a huge endorsement for absolute return investing, saying in a statement that:

“Diversification and commitment to absolute-return strategies can be crucial to long-term investment success, and we believe investors will welcome the opportunity to invest in these funds.”

Meanwhile, the hedge fund business – self-proclaimed “absolute return” providers – sure aren’t going to sit idly by and watch as mutual funds eat their lunch.  A couple of days later, hedge fund manager AQR announced that it was launching a mutual fund and had plans in the works for two more mutual funds in February.  An analyst at Jeffries Putnam Lovell told the Wall Street Journal that:

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