September 22, 2015 / 8:05 PM / in 4 years

Hedge fund launches on slower pace in 2015 -HFR data

BOSTON, Sept 22 (Reuters) - The hedge fund sector is on pace for far fewer start-ups in 2015 than in the last four years, data released on Tuesday showed, illustrating the difficulty of launching a fund even in a year that has seen a handful of prominent managers set off on their own.

Since January, 516 hedge funds have been launched, tracking and research firm Hedge Fund Research reported, noting that 252 newcomers opened their doors during the second quarter, less than the 264 launches in the first quarter.

“The number of new launches is on pace for its lowest level since 2010,” HFR said in a report issued on Tuesday. Last year a total of 2,040 new funds were started, down from 1,060 new launches in 2013 and 1,108 new funds opened in 2012. In 2010, HFR tracked 935 new launches.

New regulations which require better infrastructure and more personnel plus demands from investors for longer track records have driven up the price for starting a fund. Many analysts say it now takes roughly $500 million in assets for a successful launch.

This year has been especially difficult for hedge funds due to concerns over China’s growth, questions of when U.S. interest rates will rise again and Europe’s debt crisis. The average fund lost 2.19 percent in August and is off nearly 1 percent for the year to date, data from eVestment show.

Still, 2015 has seen prominent managers spin out of well-known established firms and attract hundreds of millions of dollars in new capital as investors searched for then next generation of star managers.

This year Didric Cederholm started Lion Point Capital after leaving Elliot Associates, Isaac Corre started Governors Lane after leaving Eton Park, David Fear launched Thunderbird Partners, former SAC Capital executive Sol Kumin launched Folger Hill Asset Management and Philip Hilal started Clearfield Capital Management after leaving Kingdon Capital Management.

A few other managers, including Chris Rokos, are still expected to launch funds before the end of the year.

What is missing this year, say analysts, are the bigger numbers of smaller players who want to join the secretive and sometimes lucrative $3 trillion industry.

While funds are tougher to start up, the HFR numbers also showed that funds may be more robust once launched.

During the second quarter only 200 hedge funds shut their doors, HFR data showed, down slightly from 217 closures in the first quarter but up from 189 liquidations in the second quarter of 2014. (Reporting by Svea Herbst-Bayliss; Editing by David Gregorio)

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below