On the surface it sounded like a good deal for all involved: Banks acquire hedge funds, and get to expand their offerings to clients, while at the same time casting a lifeline to struggling HFs, or funds of hedge funds, which are finding it increasingly difficult to attract funds and produce stellar returns. Yet it seems the buying institutions may end up getting less than they, or at least their investors, banked on. Reuters reports that the newly acquired HF businesses will likely produce lower returns for the some of the same reasons why the industry in general has been suffering: too much cash to manage and too few good opportunities. As part of a bank, hedge funds will find it a lot easier to attract money from institutional investors, such as pension funds, which find comfort in the fact that the hedgie is under control of a trusty bank. The trouble is, where to put the money to produce healthy returns? Another issue, says Reuters, is the fact that top managers at a standalone fund may not care to remain as part of a bigger bank-owned organization and jump ship.