Europe Hedge Fund Launches
Europe Hedge Fund Launches Bigger but Fewer
EuroHedge said at least 45 new offshore hedge funds were launched by European hedge-fund managers in the first half of 2011, raising a combined $5.2 billion. The average size of the funds was $116 million, compared with an average size of only $65 million in the same period last year, when 58 new funds were started for a total of $3.8 billion.
The data reflects shifts in the hedge-fund industry that have made it harder for new managers to start operations and raise money. However, many of the funds that do succeed in launching are from people who established their reputations at rival firms, giving investors a measure of faith in their records.
"Our research shows increased barriers to entry in the hedge fund industry in the wake of the financial crisis. But the rise in the average new fund size indicates that investors are increasingly keen to back proven managers at a time of change and opportunity throughout the financial industry. There have been many high-quality launches this year, often starting with significant seed investment from some very savvy investors, and the pipeline looks strong for some big new launches in the second half of the year too," Nick Evans, editor of EuroHedge, said.
EuroHedge estimates that assets in Europe-focused hedge funds managed from Europe account for around $389 billion of a $2 trillion global industry. A further $13 billion or so is in Asia-focused funds managed from the U.K. and continent. Source