Hedge fund industry most resilient

Date: Thursday, February 4, 2010
Author: Joanne Harris, HedgeFunds Review

The UK’s Financial Services Authority (FSA) authorised more new hedge fund management companies than any other financial advisory or trading sector during the last quarter of 2009, it has emerged.

Research by corporate finance consultants IMAS showed 60 applications from hedge fund managers for FSA authorisation during the full year. Only general fund management companies made more applications, with 72 companies authorised.

Private equity authorisations fell substantially during the second half of 2009.

Overall, the final quarter of 2009 saw less than 200 authorisations, a drop of around 75% from the rate of new authorisations in the first quarter of 2007, the peak of the most recent economic cycle.

But there was a fall in company cancellations at the end of 2009. The net decline in employment also improved for the third successive quarter and the number of new joiners to the financial services industry improved compared to the previous quarter.

However IMAS said industry new joiner levels remain "well below" that of 2007. Quarterly hiring numbers halved from 6,000 in the fourth quarter of 2007 to 3,000 in the third quarter of 2009.