Fri, Oct 24, 2014
A A A
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Alternative Market Briefing

Large hedge fund startups raise money easily but perform worst

Monday, July 18, 2011

From Precy Dumlao, Opalesque Asia:

Large hedge fund startups, usually with a minimum of $75m in assets under management (AuM) consistently underperform, yet it is easier for this hedge fund group to raise assets at a much higher rate compared with their smaller counterparts. This was the findings of GFIA, a Singapore-based research firm.

"Except for the very small launches, those with AUM of $5m or less on day one, and the large launches, those with AUM of more than $75m on day one, close to 80% of funds which liquidated, did so within five years from inception. The average lifespan was 3.9 years. Funds which launched with AUM of less than $5m showed low consistency in outperforming their peers, while funds which launched with an AUM of more than $75m consistently underperformed," the study said.

GFIA studied some 510 hedge funds from the Eurekahedge Emerging Market database with data going all the way back to January 2000. The research found that, over the past 11 years, close to 70% of hedge funds in Asia, excluding Japan and Australia, launched with an AUM of $25m or less. The average launch size of a fund over the same period was just $23m. No funds in the database launched with an AuM of more than $400m

Funds that launched with an AuM of between $10m and $25m tend to show the most consistent outperformance. Funds with an initial AUM of less than $5m have three-year returns that fluctuate the most, outperf......................

To view our full article Click here

Banner

Today's Exclusives Today's Other Voices More Exclusives
Previous Opalesque Exclusives                                  
More Other Voices
Previous Other Voices                                               
Access Alternative Market Briefing


  • Top Forwarded
  • Top Tracked
  • Top Searched
  1. Commodities - Oil wreaking havoc on small-cap energy stocks sliding 36%[more]

    From Bloomberg.com: Owning almost anything in the U.S. stock market has been a losing proposition since September. Owning smaller energy companies has been a catastrophe. Hercules Offshore Inc. and Resolute Energy Corp. are among 19 oil-and-gas equities in the Russell 2000 Index that lost more than

  2. Investing - Hedge funds favor equity long/short, Strategic bond managers hedge against further high yield sell-off[more]

    Hedge funds favor equity long/short From Securitieslendingtimes.com: Equity long/short strategies will generate good returns for hedge funds in the future, according to a panel at this year’s Risk Management Association Conference on Securities Lending in Naples, Florida. Panellists Sand

  3. Legal - Ex-hedge fund analyst weeps as judge hands down 5 year sentence, Former Columbus investment manager Steven P. Moore indicted on theft charges, SEBI confirms ban for Hong Kong hedge fund, SEC announces enforcement action against compliance officer[more]

    Ex-hedge fund analyst weeps as judge hands down 5 year sentence From Hereisthecity.com: An ex-hedge fund analyst was sentenced to 5 years in prison for his role in insider-trading scheme. The New York Post reports that former hedge fund analyst Matthew Teeple was sentenced Thursday to fiv

  4. Goldman in talks to acquire IndexIQ[more]

    From Bloomberg.com: Can Goldman Sachs put ETF investors on a liquid diet? Goldman is in talks to acquire IndexIQ, Reuters has reported. Index IQ is a small exchange-traded-fund firm known mostly for products that replicate hedge fund strategies, called "liquid alternative" ETFs. While IndexIQ has 11

  5. Other Voices: CALPERS dilemma should be a warning to hedge funds wanting institutional investors[more]

    From Ian Hamilton, founder of IDS Group. A quick comment on the CALPERS’ disinvestment from the hedge fund market and the jitters it is causing. Pension Funds should not be sheep and follow CALPERS’ decision as the issues that CALPERS has with hedge fund investments are in many ways unique t