Hedge Fund Capital Raises More Difficult
Recent surveys and conferences have pointed to a difficult fundraising environment for hedge fund managers. You don't need a survey or conference to realize that it would be hard to raise assets for almost any type of investment right now - but many professionals believe that hedge fund capital raising will now always be harder than it was before. I personally believe that the more that changes the more that remains the same - most hedge funds will not create a robust marketing plan and many will ignore certain capital raising channels such as broker/dealer HNW networks, small family offices and growing wealth management firms.
In my experience there is still a lot of opportunity out there for capital raising, even if we are experiencing a period right now where relationships can be grown much easier than assets. Here is an article on how the market is becoming more competitive and how family offices may be one of the top sources of new capital for hedge funds.
Hedge funds expect 2009 will be a difficult year for the industry with many looking for a dramatic increase in competition for scarce new investors according to a report by the accounting firm Rothstein Kass.
The vast majority of industry professionals (79%) believe hedge funds will revert to being a niche investment class by the end of the year.
Hedge fund managers responding to the survey said new investors would be the primary source of new capital, with 83.7% of respondents expecting competition for investors to be much fiercer than in the past.
"The sophisticated investors that comprise the traditional hedge fund asset base are generally able to tolerate short-term volatility in pursuit of long-term performance. However, recent volatility has contributed to a disproportionate shake-out," said Howard Altman, the co-managing principal overseeing the financial services group at Rothstein Kass.
He expected many hedge funds to go back to basics, with 73% of survey respondents indicating that family offices and individual investors represent the best sources of new capital. source
For dozens of additional hedge fund marketing and sales resources please see this page: Marketing & Sales Tips
For information on family offices please see FamilyOfficesGroup.com.