Hedge funds: New fund launches fall in number

In association with Hedge Fund Intelligence

Given the turmoil in global markets last year, it is not surprising that the number of new launches and the assets they raised were both sharply down in 2008 in all the main hedge fund markets. The number of new funds of $50 million or more reached 149 last year, raising combined total assets of $40.2 billion. This compares with 273 launches of that size in 2007, which together raised $69.2 billion. The figures for 2006 had been almost as high – 265 launches with combined assets of nearly $68 billion.

In the US, only 56 new funds started last year that raised $50 million or more – down from 81 new funds of that size in 2007. They raised a collective $23 billion, down from more than $31 billion the previous year. And this total was dramatically boosted by one big launch from Goldman Sachs Asset Management, which was running $5.7 billion at the year-end.

Many of the other big launches in the US last year also came from established big players, such as Appaloosa and Lone Pine.

In Europe, the total number of new funds dropped from 370 in 2007 to just 201 in 2008, with the assets raised down from $33 billion to $17.8 billion. Some 77 of those funds raised $50 million or more, with collective assets of $15.7 billion. Many of the bigger launches in Europe, such as the Brevan Howard Multi-Strategy Fund, also emerged from big established players in the business. But there were also still some significant new entrants, such as James Caird Asset Management, Arrowgrass and BlueGold.

In Asia, the total number of new funds contracted from 116 in 2007 to 75 in 2008 – with collective assets that plummeted from $7.8 billion in 2007 to just $2.9 billion in 2008. Only 16 of the new Asian funds reached $50 million or more, with collective assets of just over $2 billion. The biggest new fund in Asia last year was launched by an established firm – PMA in Hong Kong.

In association with Hedge Fund Intelligence