Hedge Fund Launches Grounded

Date: Friday, August 31, 2007
Author: Hedge Fund Daily

How slow can it go? There were only three hedge fund launches in July, compared with 40 a year ago, according to figures from The Barclay Group, as reported by HFM Week. The second quarter of this year saw just 65 roll-outs, less than one-third the 209 that debuted in the same period of 2006. Credit market turmoil is being blamed for the low numbers, as hedge funds take their cues from investors, especially the institutional variety, which are increasingly nervous about putting money in risky products. “We currently have no pension fund looking to invest in hedge funds,â€� Grant Young of investment consultant Hymans Robertson told HFM Week. Pension plans are said to delaying allocations to hedge funds or even scrapping HF plans altogether. For example, HFM Week reports, the U.K.’s Daily Mail & General Trust’s DMGT Pension Schemes is looking into alternatives to alternatives. Fund spokesman Jerry Williams said in an HFM Week interview, “We certainly are not going to invest now  in hedge funds. That attitude could explain why firm’s like Brazil’s Gavea Investimentos has announced it is postponing until further notice the launch of the Gavea Brazilian Managers fund of hedge funds, originally set for Sept. 3. Meanwhile, the market mess may be having a negative impact on already launched funds’ money-gathering efforts, as the number of hedge funds announcing closes of fund-raising efforts has dwindled in recent weeks. It may be a seasonal adjustment, or may reflect the difficulty funds are facing reaching their goals.