Herald Tribune – New hedge funds around the world attracted less investment capital in 2006 for the second year in a row after a rout in emerging markets and the collapse of Amaranth Advisors.
The 86 largest new hedge funds gathered $31 billion, compared with 82 funds and $34 billion in 2005, and 81 funds and $40 billion in 2004, according to a statement Wednesday from Absolute Return, a magazine published by HedgeFund Intelligence in London.
Established managers had better success. Seven of the top 10 new funds were founded by top-tier managers, including Jack Meyer of Convexity Capital Management, which raised $6.3 billion in a record for a new fund, and former Morgan Stanley executives, Vikram Pandit, John Havens and Guru Ramakrishnan, whose Old Lane Management raised $3.7 billion.
“Most of the launches were in the first six months of the year,” according to the statement. “But after the equity market meltdown last spring and summer hammered hedge funds, and Amaranth Advisors went bust last fall, raising money got harder for new funds.”
Hedge funds managed $1.43 trillion as of Dec. 31, according to Hedge Fund Research in Chicago. Investors poured a record $126.6 billion into new and existing funds, a 29 percent increase from a year earlier, which had the weakest inflows since 2001. The funds are private investment pools catering to wealthy investors and institutions, which typically pay annual fees of 2 percent and 20 percent of any investment gains.
