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Jeff Kollin From Kirsten Bischoff, Opalesque New York:
With the firm ground of 2010 under their feet, more prop traders and "second lieutenants" from large funds are finally feeling like it is time to spin out.
"We started to see some of it in 2010, and now, in the first month of this year, we are seeing a significant number of these new funds," says Jeff Kollin, Principal at Rothstein Kass Business Advisory Services. Kollin says that asset raising for new managers is not as much of a hurdle as it is perceived to be. Certainly it is not as high a hurdle as it was during 2008-2009, especially as more firms recognize the long-term potential of seeding these teams. "We're also seeing an entrepreneurial focus with more firms looking to seed managers."
In fact, research by Absolute Return Magazine, released on Tuesday showed that the entrepreneurial spirit of launching managers is being rewarded by allocations for managers on the hunt for emerging talent. 59 new funds with more than $50m in assets were launched in 2010, making emerging managers responsible for bringing in $17.4bn to the hedge fund industry's growth last year.
For this new generation of hedge fund managers, most of which have strong pedigrees, and track records that include the global financial crisis, the biggest challenge in spinning out of a fund is actually building a business. For managers who have been in environments where alpha generation was their only focu...................... To view our full article Click here
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