Number of New Hedge Funds Up

Number of New Hedge Fund Launches Increases

The number of new hedge funds is increasing finally and that’s great news for the third party marketing industry as more potential clients enter the industry.  With 2,100 hedge funds closed during the credit crisis, few expected a rise in new hedge fund launches this year.  But if new hedge funds continue to launch at this year’s pace, the industry may see the first year since 2005 of annual growth in new fund formations.  Hedge funds appear to be back with renewed investor confidence and new and experienced hedge fund managers ready to try it again.  Hedge fund launches have been consistently falling from 2073 in 2005 to 659 last year but this trend appears to be reversing.

It might also be that funds that had posted huge losses closed down so that the managers could start with fresh records, resetting high-water marks so that they can collect performance bonuses without making up the money lost in 2008.

When Hedge Fund Research unveiled its second-quarter data earlier this month, all eyes were focused on the slowing number of hedge fund liquidations. What was little noticed were the hedge fund launches. Since 2005, they have been falling steadily from a peak of 2073 in 2005 to 659 last year. The slide appeared to be continuing in the first quarter when 148 new hedge funds were launched. But, in the second quarter, 182 new hedge funds were launched, just as the equities markets bottomed.

The rising launches are a “constructive development,” says Ken Heinz president of Chicago-based Hedge Fund Research. “You are continuing to see risk tolerance and risk appetite improving from the historical lows at the end of 2008. ” To be sure, there are still more hedge funds shuttering their doors than opening them, with 292 going out of business in the second quarter alone, according to Hedge Fund Research. But there have been some notable launches.  Source

Tags: hedge funds, new hedge fund launches, hedge fund startups, hedge fund industry, new clients, finding hedge funds, finding new clients, hedge fund startup, hedge funds in 2009

How Do I Raise Capital?

How Do I Raise Capital to Launch a Hedge Fund?

Brent Gillett, a partner at the Investment Law Group, has contributed a question and answer series covering the establishment of a hedge fund and laws related to hedge funds.

Question: How do I raise capital to launch the fund?

Answer: Start-ups are typically marketed initially through the manager’s personal network and often through friends and family. It is also possible to raise capital from seed investors who usually require reduced fees, equity in the management company or both in consideration of the seed investment.

Guest author: Brent S. Gillett, partner at the Investment Law Group. To find more information about the Investment Law Group follow this link.

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Tags: how do I raise capital, capital raising, hedge funds capital raising, new hedge funds, launching a hedge fund, capital raising strategy, hedge fund startups, hedge fund start up, launch a hedge fund

Start a Hedge Fund | Tips & Mistakes

Below is a video which covers:

• Hedge Fund Startup Challenges
• Why over 50% of hedge funds fail (not performance)
• Emerging Fund Manager Marketing & Sales Tips
• Top 4 Things to Focus on While Raising Capital

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Tags: start a hedge fund, how to start a hedge fund, hedge fund startups, hedge fund startup and business, starting a hedge fund, hedge fund startups, hedge fund startup costs, emerging hedge fund manager

Start a Hedge Fund | Tips & Mistakes

Below is a video which covers:

• Hedge Fund Startup Challenges
• Why over 50% of hedge funds fail (not performance)
• Emerging Fund Manager Marketing & Sales Tips
• Top 4 Things to Focus on While Raising Capital

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Tags: start a hedge fund, how to start a hedge fund, hedge fund startups, hedge fund startup and business, starting a hedge fund, hedge fund startups, hedge fund startup costs, emerging hedge fund manager

Start a Hedge Fund | Tips & Mistakes

Below is a video which covers:

• Hedge Fund Startup Challenges
• Why over 50% of hedge funds fail (not performance)
• Emerging Fund Manager Marketing & Sales Tips
• Top 4 Things to Focus on While Raising Capital

(If you are viewing this via our daily hedge fund email newsletter please click here to view the video below)

Learn more about Hedge Fund Startup within our Hedge Fund Startup Toolkit.

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7. Hedge Fund Incubation Services

Tags: start a hedge fund, how to start a hedge fund, hedge fund startups, hedge fund startup and business, starting a hedge fund, hedge fund startups, hedge fund startup costs, emerging hedge fund manager

Blood on the Streets

Blood On The Hedge Fund Streets

While the economic conditions have shut down many funds, exposed fraudulent activity, and also created a unique set of opportunities for a small subset of traders and portfolio managers within the industry. The hedge fund and private equity industries are as entrepreneurial as ever.

In Q1 2009 there are hundreds of New York and London based hedge funds being started to take advantage of high volatility, historically low asset prices, and relatively cheap talent hungry for a fresh start. Many of these young hedge funds and private equity groups are not yet on the radar of institutional databases or mainstream media outlets but by Q3 and Q4 of 2009 they will be, and we will be able to see how many funds have been started around the world. I believe these figures will be high and will spur even more startup activity as others move to seize the current market opportunities.

Read dozens of hedge fund startup related articles within our Hedge Fund Startup Guide or over 50 articles on raising capital for hedge funds within our Marketing & Sales Guide.

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Tags: Hedge Fund Startups in 2009, Recent hedge fund startups, new hedge fund companies, how to start a hedge fund company, Hedge Fund Startups, Starting a Hedge Fund in 2009

Blood on the Streets

Blood On The Hedge Fund Streets

While the economic conditions have shut down many funds, exposed fraudulent activity, and also created a unique set of opportunities for a small subset of traders and portfolio managers within the industry. The hedge fund and private equity industries are as entrepreneurial as ever.

In Q1 2009 there are hundreds of New York and London based hedge funds being started to take advantage of high volatility, historically low asset prices, and relatively cheap talent hungry for a fresh start. Many of these young hedge funds and private equity groups are not yet on the radar of institutional databases or mainstream media outlets but by Q3 and Q4 of 2009 they will be, and we will be able to see how many funds have been started around the world. I believe these figures will be high and will spur even more startup activity as others move to seize the current market opportunities.

Read dozens of hedge fund startup related articles within our Hedge Fund Startup Guide or over 50 articles on raising capital for hedge funds within our Marketing & Sales Guide.

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Tags: Hedge Fund Startups in 2009, Recent hedge fund startups, new hedge fund companies, how to start a hedge fund company, Hedge Fund Startups, Starting a Hedge Fund in 2009

Hedge Fund Development

Startup & Business Development

I agree with what is said in the video below. Hedge fund startups are roaring back with hundreds of very experienced traders leaving banks, prop desks and failed funds to work for themselves. If you are reading this by email through our daily hedge fund newsletter please click here now to view the full video.

For more on hedge fund startups and formation work please see our Hedge Fund Startup Guide.

View over 100 additional videos on hedge funds here.

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Hedge Fund Startups

Hedge Fund Startups | Where are they?

Hedge fund startups are notoriously hard to track. They often don’t register with databases, comment in the press or even market their strategy until it has reached a certain length of track record. I did some research and have found that those looking for information on starting a hedge fund are still coming from all of the expected places – NYC, NJ, Chicago, Florida, California and Texas.

Here is the map showing the level of interest coming from each city (click the map to view larger version):

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Tags: Hedge Fund Startups | Where are they?, hedge fund startups, start a hedge fund, new hedge funds, starting a new hedge fund, forming a hedge fund, form a hedge fund, new fund launch

Hedge Fund Startups

Hedge Fund Startups | Where are they?

Hedge fund startups are notoriously hard to track. They often don’t register with databases, comment in the press or even market their strategy until it has reached a certain length of track record. I did some research and have found that those looking for information on starting a hedge fund are still coming from all of the expected places – NYC, NJ, Chicago, Florida, California and Texas.

Here is the map showing the level of interest coming from each city (click the map to view larger version):

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Tags: Hedge Fund Startups | Where are they?, hedge fund startups, start a hedge fund, new hedge funds, starting a new hedge fund, forming a hedge fund, form a hedge fund, new fund launch

Hedge Fund Startup

Hedge Fund Startup Tools

Due to the number of inquiries I am currently getting from hedge fund startups and emerging hedge fund managers I will releasing a number of related interviews, example documents, marketing tips and case studies which hedge funds with less than $200M/AUM may be interested in using for their businesses. These resources will be displayed here after being published:

1. Start a Hedge Fund | Tips, Tricks Video
2. Top 5 Tips for Starting a Hedge Fund (Part 1 of 2)
3. Top 5 Tips for Starting a Hedge Fund (Part 2 of 2)
4. Hedge Fund Business Plan | Plans For Growth
5. Raising Capital With Tenacity
6. Hedge Fund Marketing Tools
7. Hedge Fund Seeding
8. Hedge Fund Startup Example | Why Start Now?
9. Raising Capital for a Fund Startup
10. Hedge Fund Incubation Services
11. Setup a Hedge Fund
12. Hedge Fund Launch Quotes
13. Hedge Fund Formation | Tips on Forming a Hedge Fund
14. Hedge Fund Startup Event | Manager Needed
15. CHA Designation | Benefits to Hedge Fund Startups
16. Hedge Fund Public Relations
17. Hedge Fund Seed Capital
18. Starting a Hedge Fund | A Sample Timeline
19. How to Start A Hedge Fund
20. Hedge Fund Backers | A List of Capital Sources for Hedge Funds
21. Email Newsletter Creation Tool
22. Hedge Fund Ethics
23. Seed Capital Sources
24. Financial Advisor Marketing
25. Marketing to Institutional Investors
26. Third Party Marketing
27. Types of Hedge Fund Investors
28. The Schism | Marketing Hedge Fund Managers
29. More coming soon…

If you have any specific resource requests please send them over to Richard@HedgeFundGroup.org

To keep updated on these tool releases please subscribe to our Free Daily Hedge Fund Newsletter

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Tags: Hedge Fund Startup Tools, Hedge Fund Startups, New Hedge Funds, New Hedge Fund, Emerging Hedge Fund Managers, Small Hedge Funds, Hedge Funds with Under 100M

Hedge Fund Startup

Hedge Fund Startup Tools

Due to the number of inquiries I am currently getting from hedge fund startups and emerging hedge fund managers I will releasing a number of related interviews, example documents, marketing tips and case studies which hedge funds with less than $200M/AUM may be interested in using for their businesses. These resources will be displayed here after being published:

1. Start a Hedge Fund | Tips, Tricks Video
2. Top 5 Tips for Starting a Hedge Fund (Part 1 of 2)
3. Top 5 Tips for Starting a Hedge Fund (Part 2 of 2)
4. Hedge Fund Business Plan | Plans For Growth
5. Raising Capital With Tenacity
6. Hedge Fund Marketing Tools
7. Hedge Fund Seeding
8. Hedge Fund Startup Example | Why Start Now?
9. Raising Capital for a Fund Startup
10. Hedge Fund Incubation Services
11. Setup a Hedge Fund
12. Hedge Fund Launch Quotes
13. Hedge Fund Formation | Tips on Forming a Hedge Fund
14. Hedge Fund Startup Event | Manager Needed
15. CHP Designation | Benefits to Hedge Fund Startups
16. Hedge Fund Public Relations
17. Hedge Fund Seed Capital
18. Starting a Hedge Fund | A Sample Timeline
19. How to Start A Hedge Fund
20. Hedge Fund Backers | A List of Capital Sources for Hedge Funds
21. Email Newsletter Creation Tool
22. Hedge Fund Ethics
23. Seed Capital Sources
24. Financial Advisor Marketing
25. Marketing to Institutional Investors
26. Third Party Marketing
27. Types of Hedge Fund Investors
28. The Schism | Marketing Hedge Fund Managers
29. More coming soon…

If you have any specific resource requests please send them over to Richard@HedgeFundGroup.org

To keep updated on these tool releases please subscribe to our Free Daily Hedge Fund Newsletter

Related to Hedge Fund Startup Tools:

• Top 52 Most Popular Articles
• Hedge Fund Tracker Tool
• Financial Certification
• Hedge Fund Forum

Tags: Hedge Fund Startup Tools, Hedge Fund Startups, New Hedge Funds, New Hedge Fund, Emerging Hedge Fund Managers, Small Hedge Funds, Hedge Funds with Under 100M

Establish a Hedge Fund

Q & A: Establishing a Hedge Fund

Question: What does it take to launch a hedge fund? If I am hard working and determined I believe I can start one. As long as I never give up I will succeed right? How can you help me?

Answer: I get this question fairly often. There are many misconceptions about the hedge fund industry, two which are that all hedge fund managers are filthy rich and that most hedge funds are large entities manging billions of dollars. The truth is that hedge fund managers are paid well but most do not earn tens of millions of dollars each year – and only a small percentage of the total firms manage over a billion dollars of capital. To start a hedge fund you need:

• A deeply experienced team
• A repeatable investment process
• A business plan
• A competitive advantage
• Business risk management measures
• Portfolio risk management tools and techniques
• Capital to run the business on the first 2-3 years
• A compliance consultant or legal advisor, etc.

Launching a hedge fund is not much different than flying in some ways in that will power alone will not lift you off the ground. You must seek the appropriate resources, ensure you have enough capital to run on and you almost always have to operate as a team.

Free Daily Hedge Fund Newsletter

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Tags: Establish Hedge Fund, Establishing a Hedge Fund, Establish a Hedge Fund, How to Establish a Hedge Fund, how to setup a hedge fund, setting up a hedge fund, launching a hedge fund, help launching a hedge fund

Hedge Fund Startup

Hedge Fund Startup Marketing Q & A

Question: I understand all the legalities…but at the inception of a hedge fund what kind of material should I have squared away as far as marketing decks and PowerPoint presentations. Value proposition of course, we have pretty tight and a good selling point, what other deliverables should I work towards at this early stage?

Brief Answer: As far as marketing materials go I would make sure you have a 1-2 page quick summary piece of your hedge fund or fund of fund as a whole, within another 1 pager on your holdings – both should be updated monthly. Also it would help to develop a 20-30 page PowerPoint presentation with top notch quality graphics, layout, etc. I would make sure you stress the depth of your team, how you manage both business and portfolio risk and how your returns will be repeatable and defendable due to your consistent investment process. Those are all points that investors look for and qualities your fund must have to really succeed in the long run. Hope these ideas help.

Permanent Link: Hedge Fund Startup Marketing
Tags: Hedge Fund Startup Marketing, Hedge Fund Marketing Materials, Hedge Fund Marketing Plan, Materials for Hedge Fund Marketing, Power Point presentations, one pagers, performance

New Hedge Funds

There are somewhere between 15,000 and 19,000 hedge funds now in existence. Hundreds of new hedge funds are started each year and at least 10,000 are large enough to officially be noted within major databases and formal tracking systems.

“The hedge fund industry remains a very exciting space, and professionals that want to be in an autonomous environment are still very attracted to hedge funds,” says Marc Bender, chief operating officer of EFX Capital.

HFR data indicates that over 900 hedge funds were launched in 2007 alone while around 500 were liquidated. IDD notes that “This compares to 1,518 new funds in 2006 with 717 liquidations, and 2,073 launches and 848 liquidations in 2005, a record year. The pool of hedge funds in the almost-$2 trillion industry is around 10,000.”

“There is a lot of talent in the market now, and it’s a unique time on the Street as professionals are moving around,” says Jeremy Frommer, head of global prime services for RBC Capital Market, adding “managers need capital to get off the ground.”

Personally I believe that there will be hundreds of new hedge funds started every year for the next 7-10 years. Institutions are by and large increasing their allocations to these products and the surveys of the ultra-wealthy and high net worth financial advisers show a strong sense of confidence in increasingly using alternative assets within their portfolios. Soon I will start writing more often on exactly what financial advisers, family offices and institutions look for in hedge funds because if you work in the industry you will probably be interested in working for a hedge fund that is positioned for growth and if you invest in them I hope that you will contribute to the ongoing conversation here within this hedge fund blog and hopefully I will uncover at least one useful resource for you or your clients.

- Richard

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