More money, more problems

By Jan Alexander

Wed Feb 1, 2012


New hedge funds that launched in 2011 pulled in $19.96 billion, a big jump over the previous year. But getting off the ground is tougher than ever.


In tough times, new hedge funds need managers with strong track records just to get off the ground.

It is not surprising, then, that 2011 was a year of high-profile launches. In North and South America, only 50 new funds started in 2011 and ended the year with assets of at least $50 million, compared with 59 in 2010. Yet these funds pulled in a total of $19.96 billion, a 15 percent rise over the $17.40 billion that new funds garnered in the previous year. The sum is a long way down from the record $40 billion of 2004, when AR started tracking the biggest new fund launches, but fund start-up capital is on the rise from 2009, when the total was $14.89 billion, the worst on record since AR's biannual survey began.

Among the new funds, 42 ended the year with $100 million or more...

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