European hedge funds are begining to show promise as new launches in the US decline. One recent fund launch is DanFonds, which is focusing on frontier markets, a hybrid between the public market hedge fund approach and the private equity model.
Agilo, a London hedge fund is in talks with Hugh Hefner planning to re-open the Playboy Headquarters in London.
Banks also, such as Swiss InCore Bank AG, which is expanding its alternative investment arm by installing a hedge fund platform, Orc Trading, to replace key technology for its electronic trading operations.
A survey of 100 leading asset managers across Europe forcasts strong growth in funds of hedge funds over the next year, with less demand for single hedge funds according to 65% of asset managers in Europe.
Companies and Markets, a global investment research company, reports that asset managers in Spain and Italy believe most strongly that the demand for funds of hedge funds will outstrip that for single hedge funds, followed by France, Germany and finally the UK.
Across the five core economies in Western Europe, such as France, Germany, Italy, Spain and the UK, institutional investors now dominate the market for hedge funds, the research says. On average, slightly more than two-thirds of asset managers confirmed that this group represents their biggest customer segment for hedge funds today.
In Italy, mass market investors may also be put off by the price of hedge fund investment, according to 40% of asset managers there. In Spain, on the other hand, demand from mass market clients is being limited by competition from capital-protected and structured products and inadequate promotion of hedge fund products by banks and advisors.