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From Kirsten Bischoff, Opalesque New York:

No matter what the assets under management eventually grow to be, most hedge funds start out as one person’s dream. And for many, that dream is – simply stated – to run an investment strategy that they believe in, and to generate solid performance for their investors. While the general public is made acutely aware of the billions of dollars generated by those who manage the largest funds, many forget that a large portion of the hedge fund industry’s 7,000 funds are small businesses.

Expectations for the birth of more small funds On the heels of the larger brokerage houses cutting ties with smaller funds (the WSJ recently reported Goldman was expected to trim its prime brokerage client list by 20% or more) and restricting services such as research and capital introduction to funds over a certain asset size, there have been echoes of a service industry ringing the death knell of funds under a certain size. But the reality may be that smaller funds will continue to launch simply because of the employment turmoil in the financial markets.

Anticipating a growing pool of small hedge funds needing responsive service, hedge fund administrator HBM Group launched this year, specifically targeting his demographic of the industry.

“We think there are going to be a lot more of these smaller funds,” says HBM Group Managing Director Rob Schaeffer. “Where are a lot ......................

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