The latest major deal in the investment bank/hedge fund phenomenon came from Lehman Brothers this week. The firm announced it was buying a 20 percent stake in hedge fund manager the D.E. Shaw group, which currently has about $29 billion in aggregate investment capital.

The D.E. Shaw deal is the just the latest in a slew of investments Lehman has been making in buy-side institutions and hedge funds. The firm has already taken ownership positions in GLG Partners, Marble Asset Management and Ospraie Management and recently acquired a stake in Spinnaker Capital Group as well.

And Lehman isn’t alone. Morgan Stanley has put big bucks into alternative investment firms here in the U.S. and abroad in recent months. The latest deal for Morgan Stanley is a minority position in Abax Global Capital, a new Hong Kong-based hedge fund started by former Citadel Investment Group managers. Merrill Lynch is also getting in on the trend, buying into hedge fund DiMaio Ahmad Capital last year.

But with all of these investments and the potential for providing alternative products to clients and of course a share of the fees, questions remain about the trading desks and the technology behind them. For more on how some firms are working to incorporate their technology on the asset management and hedge funds sides, check out Advanced Trading’s latest cover story, “Can Asset Managers and Hedge Funds Converge?”