The year 2014 could be a great year for hedge fund startups as more experienced
hedge fund managers have indicated their intention to start their own firms and
larger alternative investment managers have made seed money available.
A report Pensions & Investments said that hedge funds were launched in the
recent weeks at a pace not seen since before the 2008 global financial crisis. It
added that banks are spinning out their hedge fund and proprietary units to comply
with the implementation of the Volcker Rule in the U.S. while institutional
investors are more willing to invest with managers with shorter-than-normal track
records of managing funds.
Jon Hansen, managing director and hedge fund specialist at Boston-based investment
consultant Cambridge Associates noted that towards the end of last year and at the
start of 2014, several senior hedge fund executives have left their firm to start
Cliffwater CEO Stephen L. Nesbitt added that another factor that is pushing hedge
fund launches is because many large hedge funds have closed their funds to new
investors, and many are not currently hiring.
Nesbitt described institutional investors as having reached "phase two" level which
now means most of them are in the lookout for new hedge funds to invest, as most big
funds are closed to new inve......................