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Almost half of hedge fund firms plan 2016 fund launch: trade body

[LONDON] Almost half of hedge fund firms plan to roll out a new hedge fund by the end of next year despite regulations challenging how they market, the Alternative Investment Management Association (AIMA) said on Monday.

The hedge fund trade body's study said 44 per cent of managers planned to launch a hedge fund by the end of 2016, with one third of US firms and half of UK managers preparing funds that will offer daily liquidity.

Managers with more than US$500 million were more likely to be preparing a new hedge fund than those with less than $500 million.

While UK and US-based firms were most likely to launch hedge funds, AIMA suggested more could be launched in the European Union (EU) in future due to rising interest from continental investors, particularly in Italy and Germany.

A strong pipeline of launches contrasts with a restrictive regulatory and challenging asset-raising environment in which several hedge fund firms have recently closed their doors. BlueCrest Capital Management earlier this month closed its US$8 billion hedge fund firm following pressure on fees, rising costs and lacklustre performance.

In Europe, in particular, hedge funds face strict marketing restrictions under the Alternative Investment Fund Managers Directive, which has forced 78 per cent of managers in the survey to change how they sell to EU investors.

Managers in the UK were the most concerned about the impact of regulation on their business, followed by those in North America.