Gwyn Roberts

22/06/2011 Author: Gwyn Roberts

Editor's view: 23 June 2011

In the week that the industry’s great and good gather in Monaco, many of Gaim’s attendees will be cheered by HFR’s latest launch data. With 298 new funds appearing in the first quarter, the sector appears to be in rude health, as it experiences a surge of debuts not seen since 2007.

The numbers – particularly combined with HFR’s recent impressive inflow figures – are encouraging, but those firms negotiating the Grimaldi Forum’s warren of conference rooms this week should not be lulled into a false sense of complacency. Gaim’s own delegate numbers are down this year, performance has been flat and, for every hopeful new launch, there is a worried veteran.

Many of the older funds at Gaim are still below high-water marks. In real terms, this means a significant group of managers are still struggling, cut adrift without the important economic lifeline of performance fees.

Launches were indeed impressive in Q1, but industry deaths are also on the rise. In January, February and March, 181 funds were forced to shut down, an attrition rate of 2% and the highest level of closures since 2007. With 298 v 181, the Q1’s net gain of 117 remains an encouraging sign of growth, but – as the depleted managers in Monaco will realise – now is not the time to celebrate.

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