Fund launch process hampered by rising volatility, allocator caution and capital-raising challenges – but emerging managers’ outlook stays buoyant

Over 80% of hedge fund start-ups say securing allocator capital is the biggest barrier they face, as new Hedgeweek research unearths a nervousness about the current capital raising environment.

Buoyed by strong returns last year, investors started 2022 with a positive outlook, despite clear expectations of rising volatility. But with inflation looking more persistent than expected, the war in Ukraine continuing to ripple, and the impact of Covid-19 lingering,

During the second half of 2021, and in collaboration with ANZU Research, Preqin, and Global Fund Media, SEI surveyed 160 participants – 79 hedge fund managers (General Partners, or GPs) and 81 investors (Limited Partners, or LPs) – to gather

Outsourcing, budgets, and the quant-vs-discretionary debate loom large over the US start-up process, with seeders, platforms and pods becoming increasingly important for fledgling funds.

Around 30% of emerging hedge fund firms plan to outsource more of their functions, almost double that of the industry average (17%), Hedgeweek research shows, as new managers embrace the opportunity to spend more time on alpha generation.

Hedge fund redemptions accelerated in March totalling -$35.37 billion (-0.70% of industry assets), according to the Barclay Fund Flow Indicator published by BarclayHedge, a division of Backstop Solutions. An $18.24 billion trading gain for the month combined with new entrants

Industry participants explore the key ESG issues looming large over the next few years.

Andra Ofosu, founder of Black Hedge Fund Professionals Network and director, US SALES, Aspect Capital, speaks on the diversity, equity and inclusion challenges in the hedge fund industry and advises on solutions for improvement.