Gwyn Roberts

14/12/2011 Author: Gwyn Roberts

Editor's view: 14 December 2011

Academics and industry veterans don’t always agree, but in an occasional demonstration of intellectual unity, both are fond of suggesting that the first three years of a hedge fund’s life are the most fruitful.

In pure performance terms this may well be true, but there is nothing currently blessed about the life of an early-stage manager. In fact, any fund founded in the fog of 2008 will take issue with this industry cliché as they struggle with new regulation and an investor caution that is leery of the fresh and the new. There is nothing ‘fruitful’ about preparing for Fatca or persuading consultants that your business is ready for a buy-list debut.

All is not doom and gloom. With appetites for alternatives likely to increase in the long-term – although we will see redemptions in the first quarter after a shaky 2011 – braver investors will slowly begin to seek out new opportunities. However, until this moment arrives, small and mid-tier managers – as was made clear at last week’s HFM breakfast – will have to bob and weave, even if they are experiencing a first three years of unfettered alpha.

My own third anniversary as editor of HFM passed several months ago, but from January a new editor, David Beattie, will take the reins as I move to a different role within HFM’s publisher. I know you will show him the same support and enthusiasm as you have demonstrated to me over a fascinating period of industry development. Good luck in 2012 and beyond.

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