Hedge Fund Startups Shrivel In ‘09

Feb 3 2010 | 2:32pm ET

Last year was a very good one for the hedge fund industry. It was less kind to hedge fund startups.

New hedge funds raised 36% less in 2009 than they did in 2008, as shell-shocked investors shied away from the asset class after taking a beating in 2008. All told, startups raised $15 billion last year, according to an AR magazine survey.

“There is still a reluctance of investors to part with their money,” Michaelle Celarier of AR said. “Moreover, the big issues of 2008—transparency and liquidity—continue to be major challenges for new funds.

There was not much drop off in new hedge funds with at least $50 million in initial assets, according to AR. Fifty-three debuted last year against 55 in 2008. The big decline came among the biggest funds, as only two new hedge funds launched with more than $1 billion. In 2008, there were five such funds.

Those two funds were Woodbine Capital Advisors and Roc Capital Management. The former, founded by Soros Fund Management veterans Joshua Berkowitz and Marcel Kasumovich, raised $2.5 billion. Roc, the brainchild of former Deutsche Bank global arbitrage trader Arvind Raghunathan, netted $1 billion.

10 Largest Hedge Fund Startups of 2009

Startup Assets on Dec. 31 Month Launched Strategy
Woodbine Capital Advisors $2.5 billion January global macro
Roc Capital Management $1 billion August equity market-neutral
Pia Capital Management $949 million June global macro
LDH Energy $750 million (estimated) September commodities
Realm Partners $650 million July multi-strategy/event-driven
Harbinger Capital Partners Credit Distressed Blue Line Fund $620 million April credit
Saba Capital Management $560 million August credit
Plural Investments $550 million January long/short equity
Brevan Howard Asset Management Credit Catalyst $517 million June credit
Manatuck Hill Partners $400 million JUly long/short equity

source: AR magazine


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