The relatively young and small Canadian hedge fund industry suddenly finds itself in the spotlight. Reuters reports that prime brokers are looking north to expand their business beyond Wall Street by building relationships with Canadian domestic hedge funds, while foreign institutional investors hope to tap into the oil and mining expertise of the native hedgies. “There’s some very good investment talent here that is, just now, starting to get recognized internationally,” James McGovern of Toronto-based Arrow Hedge Partners told Reuters. Fueling the interest in Canada, says Reuters, have been oil, gas and metal commodities, and some predict that the industry could double in size to C$70 billion (US$62.8 billion) in five years. On the other hand, if the current sell-off goes on for too long, says Andrew Doman of Toronto-based Abria Alternative Investments, “that would really hurt, simply because... Canada – even in the hedge-fund community – is perceived as resource experts. Right now it’s a pretty popular thing to be investing in energy and mining.” Without high-flying oil and gas, interest in Canada could tank.
