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Fund launch process hampered by rising volatility, allocator caution and capital-raising challenges – but emerging managers’ outlook stays buoyant
Institutional investors are often on the front-line of investment into new asset classes and lead the way in terms of strategy. However, they can also be large and unwieldy organisations which don’t easily lend themselves to operational innovation.
Over 80% of hedge fund start-ups say securing allocator capital is the biggest barrier they face, as new Hedgeweek research unearths a nervousness about the current capital raising environment.
PARTNER FEATURE
Buoyed by strong returns last year, investors started 2022 with a positive outlook, despite clear expectations of rising volatility. But with inflation looking more persistent than expected, the war in Ukraine continuing to ripple, and the impact of Covid-19 lingering, investors are turning to alternative asset classes to hedge against these risks and seek uncorrelated sources of return.
During the second half of 2021, and in collaboration with ANZU Research, Preqin, and Global Fund Media, SEI surveyed 160 participants – 79 hedge fund managers (General Partners, or GPs) and 81 investors (Limited Partners, or LPs) – to gather and compare their perspectives, get a glimpse of the future, and pinpoint threats and opportunities within the hedge fund industry…
INSIGHT REPORT
Outsourcing, budgets, and the quant-vs-discretionary debate loom large over the US start-up process, with seeders, platforms and pods becoming increasingly important for fledgling funds.
Around 30% of emerging hedge fund firms plan to outsource more of their functions, almost double that of the industry average (17%), Hedgeweek research shows, as new managers embrace the opportunity to spend more time on alpha generation.
Part 3 – Regulatory reporting
For any Alternative Investment Fund Manager (AIFM), the main factors that define the success of their business will be the amount of capital they are able to raise and the performance of the funds that they manage.
Hedge fund redemptions accelerated in March totalling -$35.37 billion (-0.70% of industry assets), according to the Barclay Fund Flow Indicator published by BarclayHedge, a division of Backstop Solutions.
An $18.24 billion trading gain for the month combined with new entrants to push total hedge fund industry assets to $5.14 trillion as March ended.
A majority of hedge fund subsectors tracked posted net redemptions in March. Subsectors bucking the redemption trend to post monthly inflows were led by Multi-Strategy funds, adding $3.89 billion. Others subsectors attracting new assets during the month included Sector Specific funds with $2.31 billion in inflows; Merger
PARTNER FEATURE
Part 2 – Tax Considerations
For any Alternative Investment Fund Manager (AIFM), the main factors that define the success of their business will be the amount of capital they are able to raise and the performance of the funds that they manage.
