By Lionel Laurent and Laurence Fletcher
PARIS/LONDON, Jan 27 (Reuters) - Hedge funds are prowling the post-crisis landscape looking to buy small, weakened rivals that are struggling to grow.
The most vulnerable targets are so-called funds of hedge funds, essentially a basket of stakes in individual funds, which have been among the hardest-hit by client outflows.
"Consolidation will potentially be the only way to survive for smaller funds," said Aureliano Gentilini, global head of hedge fund research at Lipper, a Thomson Reuters company. "It will be a trend that cannot be averted."
Funds of hedge funds are also seen as easier targets because they are typically run by a team rather than a single, star manager who could be difficult to replace.
"Funds of hedge funds are more sellable than single-manager funds," said Antoine Haddad, founder of Bainbridge Partners, a $950 million firm that is keen to make acquisitions.
"They are usually managed by a team and are not star-driven; you're selling a business process."
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