Richard Wilson

Hedge Fund Start-Ups Forced to Adapt

Return of the small hedge funds. I believe 2009 will be a big year for hedge fund startups. I don't believe many of these groups will register with the major databases until the end of this year but I see hundreds of new teams of traders and PMs coming out of prop trading desks, I-Banks and places like Lehman and Merrill. I have a small discussion area on hedge fund startups on my site here - richard-wilson.blogspo...

The Hedge Fund Business Is Finished and Bernie Madoff Is Sealing the Deal

I am 100% sure that hedge funds are not finished, in fact I've spoken with over 75 professionals who are starting hedge funds within Q4 2008 and 2009. I know of dozens of hedge funds with positive performance and many are now applying capital to distressed assets, mortgages and commercial real estate. With the markets turn hedge funds will be there first before ETFS, mutual funds, mom and pop stock pickers, most institutional investors and those financial advisors who select baskets of securities for their clients.

The media will continue to have a field day with Madoff and they should. If these horrible market conditions expose these types of professionals I wish we had a recession every 3 months.

- Richard
Richard Wilson
Hedge Fund Blogger
HedgeFundBlogger.com

In the Great Global Macro Experiment, the Next Bubble to Burst Is...

Thanks for the mention, always appreciated.

- Richard
Richard Wilson
Hedge Fund Blogger.com

How to Start Your Own Hedge Fund

Starting a hedge fund is much more difficult than most people believe and much more expensive than the above implies. If you only spend $15,000 - $20,000 starting your fund you are doing better than average. Having the expected service providers in place, up-to-par marketing materials, a full PPM and ongoing legal/compliance/back office support is more expensive than most fund managers expect. Many hedge funds open only to realize raising capital is very hard and every month in which they operate they are burning more money than the total of the figures above.

That said, I'm seeing a huge influx of new talent to the industry right now. In the last 48 hours I've heard from 5 new startups - that is usually what I see over 10-14 days. Many predict that Q1 and Q2 of 2009 will be a big time for new hedge fund startups. I've created a section of my site for hedge fund startups here: richard-wilson.blogspo...

Thanks for the article!

- Richard
Richard Wilson
Hedge Fund Consulting Group

Cannibalism: The Latest Hedge Fund Strategy?

I don't believe that 70% of hedge funds will be gone, I think 70% will face assets losses and then 90% of them will see a surge of new business and assets in 2010 2011. The brightest and most able work for hedge funds, this will be even more true now that investment banks are being wiped out by the day.

There is a lot of talk about hedge funds going away or all failing, I think the industry is far too diverse and nimble for that to ever happy. Once both investors and managers stop sitting on cash everything will turn around again.

- Richard
Richard Wilson
richard-wilson.blogspo...

Hedge Fund Liquidation in Pictures

I think hedge funds are going to come back stronger than ever in 2010 or 2011. Everyone talks about how they are blowing up and going away...they are sitting on cash, their investors are sitting on cash, their liquidity is restricted and the whole stock market is down. Once this turns they will reign supreme once again.

- Richard
Richard Wilson
richard-wilson.blogspo...

Cannibalism: The Latest Hedge Fund Strategy?

It is true. Obviously there are many reasons why securities are diving, including lack of general confidence within the financial sector and stock market in general, but some hedge funds are surely preying up on the securities they know their competitors are holding...and they should. They job is to produce returns for investors, not make friends with other nice hedge funds.

I think that many hedge funds are dealing with how to market their funds now that they are down 10-20% for the year - they must as many will be running in the red if they do not start generating more management fees.

- Richard
Richard Wilson
richard-wilson.blogspo...

Hedge Funds Unhappy With Brokers' Efforts To Raise Capital

The problem is that lots of prime brokerage firms would love to differentiate their services by offering capital introduction services, the truth is only 1 or 2 out of 10 hedge fund managers are really sellable to the types of investor relationships that cap intro professionals can usually leverage to raise assets for their clients. I think expectations must really be managed or a prime broker must invest very heavily in several cap intro professionals with deep capital raising experience.

Prime Broker Risks with Financial Counterparties

Thanks, I was looking for more details on counter-party risks and this article helped me out.

R

Who Has the Top Prime Brokerage Assets?

I wonder how this has shifted now, from what I hear from hedge fund managers the flight to a high quality name like Goldman is moving some accounts.

- Richard