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From Kirsten Bischoff, Opalesque New York:
While few would say the US hedge fund industry is eagerly awaiting the final passage of financial regulation, it is becoming clear that the scope of the proposed legislation is not as fearsome as it was just 6-12 months ago. Perhaps nowhere is this more apparent than in the growing number of hedge fund launches.
"Things felt very different six months to a year ago when unknown regulation was a threat for startups," Ellen Schubert, Senior Advisor at Deloitte's Asset Management Services Adviser told Opalesque.
In fact, a mere year ago the forecast for launching funds was quite grim, with many projecting that unless a manager felt reasonably certain that they could raise assets of $500m within 18 months of launching, it simply wasn't worth it to spin out on one's own. Combined with the tight job market the entire financial industry was experiencing, those brave enough to launch a fund rolling out of 2008 were often assumed to be doing so because their other options for employment were limited.
However, the biggest unknown - which was the expected cost of increased regulation - is now more easily definable, allowing managers to better gauge their chances of survival in a still tight, asset-raising environment. Expectations are that hedge funds will be required to register (most likely with the SEC), and while the process for registration will likely be onerous, (it includes having a compliance officer, a c...................... To view our full article Click here
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