Mon, Aug 31, 2015
A A A
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Industry Updates

Hedge fund launches rise as investor risk tolerance returns

Friday, June 14, 2013
Opalesque Industry Update: The number of new hedge fund launches increased for the fourth consecutive quarter in 1Q13, according to the latest HFR Market Microstructure Industry Report, released today by HFR, the established global leader in indexation, analysis and research for the global hedge fund industry. Hedge fund launches in 1Q13 totaled 297 funds, the third highest quarterly launch total since the beginning of 2008, narrowly trailing only 1Q12 (304) and 1Q11 (298). Hedge fund liquidations declined to 196 in 1Q13 from 211 and 238 in each of the prior two quarters, respectively.

Equity Hedge strategies led 1Q hedge fund launches with 132, as investors and fund managers were encouraged by strong gains in both U.S. and Japanese equities. Macro hedge fund launches totaled 93, while Relative Value Arbitrage RVA saw just 26 new funds launched in the period, following more than 200 such launches in calendar year 2012. Hedge fund launches in Europe exceeded those of the U.S. in 1Q13, with 180 new funds launched by European-located managers in 1Q versus nearly 100 by US-based firms. Hedge fund performance dispersion narrowed over the prior quarter, as the HFRI Fund Weighted Composite Index gained +3.6 percent in 1Q13 and +5.3 for the trailing 12 months ending 1Q13. The top decile of HFRI constituents gained an average of +29.8 percent over this period, while the bottom decile of all funds declined by -17.3 percent, creating a top-bottom decile dispersion of +47.1 percent. For calendar year 2012, both the top and bottom deciles were slightly higher (+32.6 and -16.0 percent, respectively) with dispersion slightly wider at +48.6 percent.

Average management and incentive fees declined for the quarter, with the average management fee falling 1 bps to 1.55 percent, while average incentive fees declined 15 bps to 18.39 percent, their 4th consecutive quarterly decline. Average management fees for funds launched in 1Q13 was 32 bps lower than those funds launched in 2012, while average incentive fees for 1Q13 launches were 17.43 percent, a decline of 31 bps from 2012 launches.

“The strong trend in new launches is consistent with the trends in rising investor risk tolerance and overall hedge fund industry capital reaching record levels,” said Kenneth J. Heinz, President of HFR. “While total industry capital is more indicative of the trends pertaining to the most established managers, new launches indicate strength, conviction and opportunity in small to mid-sized funds. In contrast to 2007, when billion-dollar launches were not uncommon, investors in 2013 prefer allocating to managers which have generated strong performance through several market cycles, rather than committing to a large day-one investment. As investor risk tolerance continues to improve, new fund launches will define the next generation of performance, strategic innovation and capital expansion.”

HFR

Press Release

BM

What do you think?

   Use "anonymous" as my name    |   Alert me via email on new comments   |   
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. Investing - Hedge funds suddenly find real money is back in Argentina's debt, Elon Musk buys more SolarCity stock following hedge fund manager short, BlackRock plans to get into rental-home financing[more]

    Hedge funds suddenly find real money is back in Argentina's debt From Bloomberg.com: The real money is back in Argentina. Before the country’s default in July 2014 (its second in 13 years), most long-term investors abandoned its bond market. As they rushed out, Argentina became a favorit

  2. Activist News - Carl Icahn has snapped up a huge stake in Freeport-McMoRan, and the stock is ripping, Meet Europe's best activist investor[more]

    Carl Icahn has snapped up a huge stake in Freeport-McMoRan, and the stock is ripping From Businessinsider.com: Carl Icahn has picked his next target: Freeport-McMoRan. Icahn and a group of other investors have snapped up an 8.46% stake in mining company Freeport-McMoRan, according to a j

  3. North America - Hedge fund manager Ray Dalio’s challenge to the Fed[more]

    From Newyorker.com: For some reason, Janet Yellen, the chair of the Federal Reserve, decided to skip this year’s annual Fed conference in Jackson Hole, where monetary policymakers from the United States and abroad get together with some prominent academics to discuss the big issues of the moment. Th

  4. Performance - Hedge funds set to bank millions by short selling during London share slump, The China market chaos has made this hedge fund its most money in 2 years, Odey hedge fund said to surge 9% betting against China, Hedge funds with long-held bearish views on China rack up profits, Hedge funds in U.S. seen curbing damage from August turbulence, Hedge funds collect on their predictions of a fall, How did managed futures do while the Dow was down 1000[more]

    Hedge funds set to bank millions by short selling during London share slump From TheGuardian.com: Hedge funds are set to bank tens of millions of pounds from the slump in share prices in London, having bet almost £18bn that the FTSE 100 would fall. The funds making the bets include Lansd

  5. Opalesque Exclusive: John C Head IV leaves alternative investment firm Gallery Capital, David Harrison joins as co-CIO[more]

    Benedicte Gravrand, Opalesque Geneva for New Managers: John C Head IV, former president and co-founder of Gallery Capital Management, an alternative inv

 

banner