Mon, Aug 15, 2022
A A A
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Alternative Market Briefing

Large hedge fund startups raise money easily but perform worst

Monday, July 18, 2011

From Precy Dumlao, Opalesque Asia:

Large hedge fund startups, usually with a minimum of $75m in assets under management (AuM) consistently underperform, yet it is easier for this hedge fund group to raise assets at a much higher rate compared with their smaller counterparts. This was the findings of GFIA, a Singapore-based research firm.

"Except for the very small launches, those with AUM of $5m or less on day one, and the large launches, those with AUM of more than $75m on day one, close to 80% of funds which liquidated, did so within five years from inception. The average lifespan was 3.9 years. Funds which launched with AUM of less than $5m showed low consistency in outperforming their peers, while funds which launched with an AUM of more than $75m consistently underperformed," the study said.

GFIA studied some 510 hedge funds from the Eurekahedge Emerging Market database with data going all the way back to January 2000. The research found that, over the past 11 years, close to 70% of hedge funds in Asia, excluding Japan and Australia, launched with an AUM of $25m or less. The average launch size of a fund over the same period was just $23m. No funds in the database launched with an AuM of more than $400m

Funds that launched with an AuM of between $10m and $25m tend to show the most consistent outperformance. Funds with an initial AUM of less than $5m have three-year returns that fluctuate the most, outperf......................

To view our full article Click here

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. Opalesque Exclusive: Hong Kong manager expects additional tailwind in Asian markets[more]

    B. G., Opalesque Geneva: The Asia equity markets have not been at their best so far this year, with the MSCI Asia index down almost 13% YTD, but many managers remain buoyant about the region, as in

  2. Opalesque Exclusive: Emerging markets persist despite headwinds[more]

    Bailey McCann, Opalesque New York: Emerging markets have been under significant pressure since the start of the year, but there are some nascent trends that suggest that things could be getting better. Emerging markets firm Gramercy Fund Management recently released its third quarter outlook and

  3. Opalesque Exclusive: Castle Hall's DiligenceExchange free Transparency Reports cover 100 managers with $10tn of assets[more]

    Matthias Knab, Opalesque for New Managers: Managers and investors can get free access to DiligenceExchange here: https://bit.ly/DXCInfo Castle Hall, the Du

  4. Other Voices: ESG exuberance is at all-time highs. But will investors buy?[more]

    As investors increase their focus on mission-based investing, they continue to grapple with ESG and what it means to them. By David Shalom, Director of Capital Introductions at Pershing Innovation. New investment solutions. That's how managers deliver value and attract new inve

  5. Opalesque Exclusive: This European mezzanine debt strategy offers equity-like returns with downside protection[more]

    B. G., Opalesque Geneva for New Managers: Mezzanine financier SIG-i operates in a relatively uncrowded space by proactively manufacturing financing solutions as an alternative to traditional debt and equity instrume