Hedge Fund Launches Comeback In 2007

HedgeCo.net (New York) – The Absolute Return New Funds Survey, published in the July/August issue of Absolute Return magazine, shows that new hedge fund launches in the United States so far this year are up sharply over the same period in 2006.

Between January and June 2007, 72 new funds began trading with a total of $14 billion. That’s significantly more than in the same period in 2006, when 51 new funds were launched, raising $11.7 billion. This year, three funds were launched with more than $1 billion, in contrast to last year’s first half, when only one fund managed to surpass the billion-dollar mark. Domestic long/short equity funds dominated 2007’s first half, with 28 launches that collectively raised $4.7 billion, up from 19 launches and $2.9 billion during the same period last year.

The biggest launch so far this year is Carlyle Group’s Carlyle Bluewave, a multistrategy fund that began trading with an estimated $2 billion. The second largest was Minneapolis-based CarVal Investors’ CVI Global Value Fund, a distressed portfolio that raised $1.4 billion. San Francisco based GMN Capital’s GMN Master Fund, the largest global launch, landed in third place with $1 billion raised.

This year’s new funds are highly diversified, with the ten largest new funds almost equally split among domestic equity, global and multistrategy portfolios.Other new niche strategies this year include five healthcare funds with a combined total of $860 million and a natural resources fund with $61 million. Also included is a pair of asset managers in Brazil that raised nearly $100 million in total (foreign funds in previous Absolute Return New Fund Surveys were limited to Canada).