John Griffiths, Member, at Kinetic Partners comments on the fall in Hedge Funds being authorised in 2012: “The last twelve months have seen a fall in the number of hedge funds being authorised in Europe and the US. There are three reasons for this. Firstly, larger firms are holding stronger market positions and are more able to meet costs of starting a new fund. As such, institutional investors are seeking out larger, well-established funds with strong track records and robust compliance controls. Secondly there have been reports of investment banks facing increasing competition for staff which has subsequently pushed up the remuneration packages for strong performers. This would reduce the financial incentive to set up a new fund. Thirdly, there are many new regulations being established at the moment such as AIFMD and CFTC, so potential fund managers may be waiting to assess the impact of these regulations before moving forward. “Certainly it does seem that many start-ups are often spin offs of larger firms (and seeded) by these firms. It is simply that much more difficult for unknown and unseeded start-ups to enter the market.”
Posted on: Mon, 04 Nov 2013 10:38:59 +0000
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