Finance and M&A News and Updates

Hedge funds on average were down 18.5 percent for 2008 (as of November), and assets under management, which peaked at almost $2 trillion last June, shrank by almost one-fifth (as of October), according to Hedge Fund Research data. The Washington Post says assets under management could shrink by as much as 75 percent.

For a while, it seemed like open season on the Treasury Department and the criticisms were flying fast and furious. In hindsight, the department was, and is, something of an easy target because the task was all but impossible: Implement a package to basically save the world economy--on the fly.

FINRA has found that two units of E-Trade did not have adequate anti-money laundering programs in place. Such policies and procedures "could not reasonably be expected to detect and cause the reporting of suspicious securities transactions." The lack of automated tools was noted. Article

JPMorgan Chase has fared as well as any bank in the credit crunch. It has emerged as one of the Big Four and seems to be bent on strategic expansion in a way that Citi is not. Case in point: JPMorgan will buy two units from UBS, a Canadian commodities energy business and its global agricultural business. Both allow for strategic fills. Terms of the deal were not disclosed, but the general view is that while JPMorgan is in position to make these sort of deals, Citi is not. In fact, most people think that Citi needs to stay focused on asset sales.

How bad is it going to get for the asset management industry? A new study from Casey Quirk says that asset-based fees will fall 25 percent between 2007 and 2009. That will have a seismic affect on operating profits, which will drop 30 to 35 percent between 2007 and 2008, and another additional 30 to 35 percent in 2009, if costs are not cut significantly. Margins would decline from 33 percent of revenues in 2007 to just 22 percent in 2009.