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By Beverly Chandler, Opalesque London:
Whisper it, but things are definitely picking up in the hedge fund space, says Patric de Gentile-Williams, COO of FRM Capital Advisors. In an interview with Opalesque, de Gentile-Williams reports that he is seeing deals being done, investors showing interest and new participants in the sector.
However, he cautions: “It is very difficult to have a credible launch without some sort of strategic investor. Not just seeders, but anybody who publically commits meaningful amounts of capital early on to a manager.”
The support of a high profile strategic investor gives new hedge funds critical mass, validation for institutions and robust finances from an opening set of fees which go some way to paying for their infrastructure.
“It’s a trend that was happening anyway,” says de Gentile-Williams. “Back in 2000, we had a situation where there was a sudden huge spike in demand as institutions started to allocate to hedge funds, and that caused an excess of demand over supply so it became relatively easy to launch a hedge fund.”
This cycle hit its highest point in 2005 with 2200 new funds. 2008 saw the bottom of the cycle and the credit crisis simply added pressure to rising due diligence demands of investors. “The crunch has made the entry barriers to business much higher” says de Gentile-Williams. “Institutional standards of due diligence have become intense so it can be...................... To view our full article Click here
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