Poll Finds Sharp Uptick in Hedge Fund Start-Ups

July 9, 2007 (PLANSPONSOR.com) - A new survey has found that 2007 U.S. hedge fund launches are up sharply over last year.

According to press release from Absolute Return Magazine, its survey found that between January and June 2007, 72 new funds began trading with a total of $14 billion.

That was significantly more than in the same period in 2006, when 51 new funds were launched, raising $11.7 billion.

Domestic long/short equity funds dominated 2007’s first half, with 28 launches that collectively raised $4.7 billion, up from 19 launches and $2.9 billion during the same period last year.

In fact, three funds were kicked off in 2007 with more than $1 billion, compared with last year’s first half, when one fund managed to surpass the billion-dollar mark, the magazine said.

The biggest 2007 launch has been the Carlyle Group’s Carlyle Bluewave, a multistrategy fund that launched with an estimated $2 billion. The second largest was Minneapolis-based CarVal Investors’ CVI Global Value Fund, a distressed portfolio that raised $1.4 billion. San Francisco-based GMN Capital’s GMN Master Fund, the largest global launch, captured the third-place spot with $1 billion raised.

The 2007 launches are highly diversified, with the ten largest new funds almost equally split among domestic equity, global and multistrategy portfolios, the press release said.

Other new niche strategies this year include five health care funds with a combined total of $860 million and a natural resources fund with $61 million.