Seward & Kissel, the law firm that helped create the first hedge fund in 1949, announced its second annual study of New Hedge Funds in the U.S.
The New Hedge Fund Study: 2012 Edition, has revealed that 64% of new funds covered by the study had equity or equity-related strategies, up 14% from the 2011 study.
Of the 64% of new funds involved in equity or equity-related strategies, Seward & Kissel found that about 55% were focused on U.S. and North American equities and approximately 30% had a sector focus, with the most popular sector focuses being healthcare and TMT.
Key Findings
– In 2012, 64% of new hedge funds had equity or equity-related strategies (up 14% from the 2011 study).
– Management fees were generally higher for non-equity strategies, while incentive allocation rates continued to be pegged at 20% of annual net profits across all strategies.
– More funds permitted monthly redemptions in 2012 as compared to 2011 (the percentage increased from about 25% in 2011 to 36% in 2012), and a higher percentage of equity strategies had lockups or gates as compared to non-equity strategies.
– Sponsors of both U.S. and offshore funds set up master-feeder structures over 80% of the time. Most offshore funds were established in the Cayman Islands.
– In the area of seed capital, the initial funding in many of the bigger deals was between $75 million and $150 million typically locked up for two or three years; for the smaller deals, the amounts ranged from $10 million to $50 million. The full study is available here.
About Alex Akesson
Alex has been specializing in hedge fund and alternative investment news since April 2006. Working mainly in research and manager interviews, she has published breaking news on the hedge fund industry on her blog, as well as several industry publications.
Her access to hedge fund managers gives her insight into news stories as well, and the ability to track press releases and other breaking news in real time.
14% Jump in New Hedge Funds with Equities Strategies
Seward & Kissel, the law firm that helped create the first hedge fund in 1949, announced its second annual study of New Hedge Funds in the U.S.
The New Hedge Fund Study: 2012 Edition, has revealed that 64% of new funds covered by the study had equity or equity-related strategies, up 14% from the 2011 study.
Of the 64% of new funds involved in equity or equity-related strategies, Seward & Kissel found that about 55% were focused on U.S. and North American equities and approximately 30% had a sector focus, with the most popular sector focuses being healthcare and TMT.
Key Findings
– In 2012, 64% of new hedge funds had equity or equity-related strategies (up 14% from the 2011 study).
– Management fees were generally higher for non-equity strategies, while incentive allocation rates continued to be pegged at 20% of annual net profits across all strategies.
– More funds permitted monthly redemptions in 2012 as compared to 2011 (the percentage increased from about 25% in 2011 to 36% in 2012), and a higher percentage of equity strategies had lockups or gates as compared to non-equity strategies.
– Sponsors of both U.S. and offshore funds set up master-feeder structures over 80% of the time. Most offshore funds were established in the Cayman Islands.
– In the area of seed capital, the initial funding in many of the bigger deals was between $75 million and $150 million typically locked up for two or three years; for the smaller deals, the amounts ranged from $10 million to $50 million. The full study is available here.
About Alex Akesson
Alex has been specializing in hedge fund and alternative investment news since April 2006. Working mainly in research and manager interviews, she has published breaking news on the hedge fund industry on her blog, as well as several industry publications. Her access to hedge fund managers gives her insight into news stories as well, and the ability to track press releases and other breaking news in real time.