As the US economy begins to pick up pace, the number of hedge fund launches has also begun to rise. But although many of the challenges faced by managers are still very much the same – including capital raising and establishing a robust business strategy – firms will be entering a different playing field from years past.
The whole industry has had to re-evaluate and adapt to greater regulatory and compliance burdens, as well as increasing investor demands. What this means for emerging hedge fund managers is that a comprehensive and concrete pre-launch analysis must be in place to reduce the risk of early issues.
This does not mean that the homework is different this semester. Attracting investor capital is as difficult as ever and perhaps even more challenging is accommodating demands for transparency and reduced fees from institutional investors, as institutional capital continues rising in the alternatives space.
As this HFMWeek report discusses, considering the strategies, structures and partnerships available to emerging hedge fund managers prior to launch is crucial. And as preserving capital remains as important as ever, so too is choosing the right service providers and understanding the distinction between essential and complementary solutions.