maybe from a private investor's poitn of view would onickjo be right - i think the question was more focused toward how funds benefit the banks that do business with them - which is what zk1085 was correct on - flow business. Honestly, isn't the answer simply because they draw in huge fees? The sell side feeds off of the buyside.

Plus hedge funds are the people acting as counterparties for all of those OTC transactions that banks like to take part in. and of course, everyone's favorite BS reason - it creates liquidity. lol

 
onickjo:
i'm obviously missing something, please clarify your answer
I think the OP was trying to ascertain what benefits 2 and 20s bestow upon different bank divisions. Excluding prop, S&T is a flow business. Hedgies are a 2 trillion dollar industry. The coverage and the trader will facilitate a trade and take and take a spread. A there-through-volume spread for vanillas or a meaningful spread for some of the more opaque instruments.
 

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