Marketing relationships in financial services business markets: the global hedge fund industry

The global hedge fund industry, a technology-based network of varied organisational forms and relationships, was chosen for this research in order to gain theoretical insight into relationships, networks and markets. Hedge funds are investment vehicles which are global, privately owned, based off-shore, and not required to reveal their investment strategy. There are approximately 8,000 hedge funds globally, managing $1.225 trillion (Hedge Fund Research Inc.). This research used qualitative methodology, based on 21 face-to-face in-depth interviews, to investigate perceptions of primary relationships and of relationships in the network. The dyadic relationship investigated was that of the hedge fund manager with the prime broker, usually an investment bank. Results show that hedge fund relationships are characterised by heterogeneity, asymmetry and "multiplicity, variety, and ambiguity". Relationships are driven by performance and profitability and managers demonstrate aggressive competition for control of resources. There is also evidence of ambiguity with relationships being both cooperative and competitive. Networks were found to be purely transactional and institutionalised on one level, and yet relational on a different level