Optimists predicting a hedge fund rebound finally have some strong indicators to point to, according to Ellen Schubert, Deloitte’s Asset Management Services Adviser.

“Despite the potential for a higher cost of doing business that comes with regulation, we are seeing more start ups – and with less money,” Ellen said, “As recently as six months ago people said you couldn’t make it with $50 million and a small staff anymore, but this is exactly the size shop we are seeing spring up. The money is there to seed them. We’re also seeing managers spin out of big funds in real numbers, a reverse of the trend of managers joining big funds for their stability during the market downturn.

“What does this mean? It may mean people are confident that we have hit bottom and they want to get in at the ground level. I think the industry will remain cautious for the time being, but clearly there is movement towards an uptick in funds, which I think is being driven by finally finding the market floor.”