SOURCE: AR: Absolute Return + Alpha

AR: Absolute Return + Alpha

July 06, 2010 12:10 ET

Number of New Fund Launches Doubles in First Half of 2010, AR Survey Finds

New Funds Raise $10.9 Billion, up Nearly Three Times Over the First Half of 2009

NEW YORK, NY--(Marketwire - July 6, 2010) -  The environment for hedge fund launches has improved significantly this year. New funds that launched in the first half of the year garnered $10.9 billion, according to the latest survey of hedge fund start-ups in AR Magazine.

That's nearly three times the first half of 2009, when funds launched in the first half of that year amassed just $3.9 billion -- an all-time low for the survey in terms of both assets and fund launches, according to the biannual AR New Funds Survey, published in the July/August issue of AR and online at www.absolutereturn-alpha.com

At least 43 funds with $25 million or more under management launched in the first half of 2010. The biggest launch so far for 2010 is Overland Advisors, the spin-off of a proprietary trading group at Wells Fargo. The multistrategy relative-value shop, headed by Derek Dunn and Gordy Holterman, raised close to $3.4 billion from Wells Fargo in the form of a separate account and an additional $204 million from outside investors.

The full ranking and commentary can be found online at www.absolutereturn-alpha.com.

Andrew Hall, the former Citigroup star energy trader whose proposed $100 million bonus last year came under public criticism, attracted $1.2 billion for his commodities strategy Astenbeck Commodities Fund II.

"But even though new fund launches have increased, it is still tough to raise money without an established pedigree," said Amanda Cantrell, managing editor of AR. "The top five launches comprised the lion's share of the assets, and all of those launches came from established players, including Highbridge Capital Management and Paulson & Co." The top five funds managed $6.3 billion, or 58% of the total assets managed by the largest launches.

The three largest funds by assets this year -- excluding Overland Advisors and Astenbeck Capital -- were new strategies from multibillion-dollar hedge fund firms Highbridge, Paulson and Randall Smith's Alden Global Capital. All three were able to raise about $500 million each for Highbridge Event Driven Opportunities, Paulson Gold and Alden Global Value Recovery.

About AR
AR magazine, and its online offering at www.absolutereturn-alpha.com, features a fresh and much needed link between the hedge fund industry, its users and those who provide advisory, financial, and technological services to the sector. AR is a publication of Institutional Investor and HedgeFund Intelligence, divisions of Euromoney Institutional Investor, the international publishing and information company.

See www.absolutereturn-alpha.com for more information.

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