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Bailey McCann, Opalesque New York:

New data from Walkers, a Cayman Islands-based legal and professional services firm, shows that despite a challenging year for the hedge fund industry new launches are continuing. Those launches are coming both from individual and institutional managers. The only lagging group is hedge fund of funds which have not yet rebounded to pre-2008 levels.

The structure of these new funds has shifted away from the traditional master-feeder fund and more toward standalone funds. There are twice as many standalone fund launches as there were in 2012. Standalone funds can cost less initially than the master-feeder structure if the targeted investor group does not require an onshore feeder fund. The growth in "other" structures indicated by the chart below largely represents unit trusts aimed at the Japanese market.

On a strategy-by-strategy basis Equity Long/Short remains the most popular despite increasingly crowded trades and a limited trading edge. New launches in credit strategies are also on the rise, even as new managers find it difficult to access credit themselves further underlining the pent-up demand for credit as banks have changed how they do business since 2008. Report authors also note that the "competitive fund raising environment has placed continued pressure on fees and fund terms, and has forced managers to seek innovative approaches to attract investors without ......................

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