Tuesday, 22 July 2014
Last updated 21 min ago
Jun 13 2013 | 10:25am ET
Hedge fund launches increased for the fourth consecutive quarter in Q1 2013, according to Hedge Fund Research.
All told, 297 funds were launched in the first quarter of the year, the highest total since the beginning of 2008.
On the flip side, hedge fund liquidations declined to 196 during Q1 from 211 and 238 in each of the prior two quarters, respectively.
The bulk of the new launches—132—were equity hedge strategies, which HFR attributes to the strong performance of U.S. and Japanese equities. The industry gained 93 new macro funds in Q1 and relatively few—26—new relative-value funds.
More new funds (180) were launched in Europe than in the U.S. (100) during the first quarter.
The quarter also saw a 1 bps decline in the average management fee to 1.55% and a 15 bps decline in the average incentive fee to 18.39%.
“The strong trend in new launches is consistent with the trends in rising investor risk tolerance and overall hedge fund industry capital reaching record levels,” said Kenneth J. Heinz, president of HFR, in a statement.
“While total industry capital is more indicative of the trends pertaining to the most established managers, new launches indicate strength, conviction and opportunity in small to mid-sized funds. In contrast to 2007, when billion-dollar launches were not uncommon, investors in 2013 prefer allocating to managers which have generated strong performance through several market cycles, rather than committing to a large day-one investment. As investor risk tolerance continues to improve, new fund launches will define the next generation of performance, strategic innovation and capital expansion.”
Jul 8 2014 | 10:48am ET
The surge in derivatives regulation is among the most complex challenges facing the financial services industry today. Northern Trust’s Joshua Satten recently spoke with FINalternatives to share insights into the challenges presented by new regulation and explore how the industry is responding. Read more…