Hedge Fund Mania Endures

The hedge fund business isn't what it was, but banks clearly continue to see opportunity in this space.

The latest evidence of this comes from Deutsche Bank (DB Quote), which Monday announced it had hired Jeff Knupp from Morgan Stanley (MS Quote) to lead its Midwest sales effort for prime brokerage, the division that provides services to hedge funds.

European banks like Deutsche, Credit Suisse (CS Quote) and UBS (UBS Quote) have lately been moving to take away business from hedge funds, an area that was dominated for several years by Morgan Stanley and Goldman Sachs (GS Quote).

Banks also continue to like having their own hedge funds, as indicated by JPMorgan Chase's (JPM Quote) recent decision to buy the rest of Highbridge Capital Management, a hedge fund in which it had a 77.5% stake at the end of 2008, according to Bloomberg.