EuroHedge New Fund Survey, first half 2011: Number of new funds down, but average size up sharply

Wed Jul 27, 2011

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• Volume of new hedge fund launches in Europe still way below precrisis levels, but value of assets raised by new funds rises by 40% on previous year • Average new fund launch size reaches an all-time high, eclipsing pre-crisis peak in H1 2008

London, 26 July 2011 – The number of new European hedge fund launches is still running at historically very low levels, but the average size of the new funds is at an all-time high.

That is the central finding of the first-half 2011 new fund survey conducted by the EuroHedge data and research team – which shows that at least 45 new offshore hedge funds were launched in Europe during the first half of the year, raising a combined $5.2 billion in assets.

Although the number of new launches is down on the first half of 2010, when there were 58 new offshore funds, the total assets figure is almost 40% higher than the $3.8 billion raised by new funds in the first half of last year.

Furthermore the average size of the funds launched so far this year is nearly double – at $116 million, compared with $65 million last year.

The average size of this year’s new starts is higher than it has ever been – surpassing the $102 million average new fund size seen in the first half of 2008 just before the global financial crisis, which was the previous peak, and almost three times the $44 million average size of new funds launched in the first half of 2009.

No fewer than 13 of the new funds have launched with assets of $100 million or more already this year, and the pipeline for further significant launches in the second half of the year also looks encouraging.

UCITS comparison
Together with the $2.6 billion raised by the 48 new UCITS-compliant onshore European hedge funds that have also been launched in the first six months of this year, the combined totals for all onshore and offshore hedge fund launches reach much more substantial levels – with almost 100 new funds raising combined assets of nearly $8 billion.

Arguably this combined picture presents a fairer historical comparison – given that many managers (particularly the more institutional asset management firms) are electing to launch new funds in a UCITS format – although a number of the ‘new’ UCITS launches are simply new onshore versions of existing offshore strategies.

Even so, with the exception of the first half of 2009, the combined new fund launch totals in Europe are lower than at any time since 2003.

Taking the offshore and onshore hedge fund launches together, the combined figures of 93 funds and $7.8 billion is in line with the long-term yearly average over the 12 years that EuroHedge has been compiling the new fund surveys. Since 2000, the average for first-half launches works out at 99 funds and $7.9 billion in assets raised.

In terms of location, the UK remains the clear centre of choice for both offshore and onshore hedge fund managers – accounting for 66% of the number of hedge funds launched and 90% of the assets raised, and for around 60% of the new UCITS launches.

Nick Evans, editor of EuroHedge, commented: “Our research shows increased barriers to entry in the hedge fund industry in the wake of the financial crisis.  But the rise in the average new fund size indicates that investors are increasingly keen to back proven managers at a time of change and opportunity throughout the financial industry. There have been many high-quality launches this year, often starting with significant seed investment from some very savvy investors, and the pipeline looks strong for some big new launches in the second half of the year too.”

To read the full findings go to the EuroHedge New Fund Survey

About EuroHedge and HedgeFund Intelligence
EuroHedge is published by HedgeFund Intelligence, the leading provider of news, analysis and performance data on the global hedge fund industry. The company provides dedicated information on US, European, Asian and African single-manager hedge funds as well as on hedge fund investors worldwide.

For more information contact:
Nick Evans, EuroHedge Editor, +44 20 7779 7355 /

Del Jones, Merlin PR, +44 20 7726 8400 / +44 7787 183 306 /

Neil Wilson, Editorial Director, HedgeFund Intelligence: +44 20 7779 7359 /

ISSN: 2151-1845 / CDC10004H

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