The Markets February 7, 2007
Latter 2006 Sees Slower Hedge Fund Growth
New hedge funds had a difficult time raising money in the second half of 2006 after the equity market slowdown at midyear and the later meltdown of Amaranth Advisors, according to a new study from Absolute Return magazine.
Reported by Fred Schneyer
Hedge fund launches in the U.S. slowed for the second year in a row to the 86 largest fund launches raising $31 billion, down from the 2005 performance of 82 funds raising $34 billion and the 2004 showing of 81 funds raising $40 billion, a news release said.
Also, most of the 2006 launches were in the first six months of the year because new funds had a harder time getting new capital. Only 29 funds raising at least $50 million – the minimum required to be included in the survey – were kicked off in the July to December period. These funds raised $6.2 billion, or 20% of the total, according to the press release.
During 2006, six new funds raised more than $1 billion with the biggest, Convexity Capital, setting a new record in terms of assets for its $6.3 billion fund launch last February. Convexity was founded by Jack Meyer, the former Harvard University endowment money manager.
For the first time in the survey, fixed-income and high-yield funds surpassed equity and multi-strategy hedge funds in raising assets, amassing $9.8 billion among 14 funds, according to the survey. Multistrategy funds came in second with $8.1 billion in 17 funds, down from $11.5 billion in 11 funds in 2005. Distressed funds took in $1.9 billion in three funds, a huge drop from the $9 billion they garnered through the same number of launches in 2005.
More information is at http://www.hedgefundintelligence.com/ar/current.htm (a subscription is required).
Also, most of the 2006 launches were in the first six months of the year because new funds had a harder time getting new capital. Only 29 funds raising at least $50 million – the minimum required to be included in the survey – were kicked off in the July to December period. These funds raised $6.2 billion, or 20% of the total, according to the press release.
During 2006, six new funds raised more than $1 billion with the biggest, Convexity Capital, setting a new record in terms of assets for its $6.3 billion fund launch last February. Convexity was founded by Jack Meyer, the former Harvard University endowment money manager.
For the first time in the survey, fixed-income and high-yield funds surpassed equity and multi-strategy hedge funds in raising assets, amassing $9.8 billion among 14 funds, according to the survey. Multistrategy funds came in second with $8.1 billion in 17 funds, down from $11.5 billion in 11 funds in 2005. Distressed funds took in $1.9 billion in three funds, a huge drop from the $9 billion they garnered through the same number of launches in 2005.
More information is at http://www.hedgefundintelligence.com/ar/current.htm (a subscription is required).