New Hedge Funds Raise $17B in 2010, Up 17% Over Bleak 2009

Feb 1 2011 | 10:11am ET

Things are looking up in the hedge fund space—after a dismal 2009, 2010 saw the launch of at least 59 funds with over $50 million in AUM, according to AR magazine’s New Funds Survey. Together, these funds attracted $17.4 billion.

That total result represents a 17% improvement over 2009’s total of $14.89 billion, an all-time low. That year also saw an all-time low number of new launches (53).

Leading the pack was Bridgewater Associates’ Bridgewater Pure Alpha Major Markets Trading Fund, which incorporates the most liquid portions of its high-performing  flagship, Bridgewater Pure Alpha. The new trading vehicle, which had AUM of $2.4 billion as of December 2010, was not marketed to new investors but instead was created for clients with gains from the flagship fund that could not be reinvested in that fund.
 
Two funds from investment bank prop desks also broke the $1 billion mark. Overland Advisors, the spin-off of a proprietary trading group at Wells Fargo, raised $2.2 billion in assets. The multi-strategy relative-value firm is headed by Derek Dunn and Gordy Holterman.
 
Former Citigroup star energy trader Andrew Hall, whose proposed $100 million bonus last year came under public scrutiny, attracted $1.5 billion for his Astenbeck Commodities Fund II.

Michelle Celarier, editor of AR, said, “New fund launches increased at a healthy rate last year, though 2010’s total is well shy of the $23.17 billion reached in 2008 and less than half of the record $40 billion amassed in 2004. Our survey indicates that investors remain skittish about backing brand-new managers, and raising money is still far more challenging that it was before 2008.”
 
The survey appears in the February issue of the magazine.


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Editor's Note