By Lydia Tomkiw

The frenzied merger and consolidation activity roiling the hedge fund of funds space the last few years may have cooled off, but it has left room for unique deals – and more are likely, experts say.

The resources and overhead required to successfully run a fund of funds could mean some more consolidation or creative arrangements ahead for smaller firms, says Stuart Blair, director of research at Canterbury Consulting. "The funds of hedge funds that are in the $500 million to $2 billion range are probably still ripe for consolidation, acquisition or wind down."

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