Seward and Kissel Hedge Fund Survey - tough for start-ups

The Economist noted the challenging environment for hedge funds last month. New launches are down and liquidations, albeit down are similar to the launch levels. The net number of hedge funds outstanding is not growing quickly. Small funds are having a hard time surviving or starting. Seward and Kissel released their 2015 New Hedge Fund Survey with some interesting insights that reinforce current trends. 

The focus of most hedge fund launches is still equities. For all of the talk of alternatives, many managers and investors still want to pick stocks. Fees are coming down slightly with new firms offering size and founder discounts. What is more interesting is the continued demand for lock-ups. There seems to be agreement that it takes time to grow so managers are asking for sticky money and investors are willing to accept these terms.  New launches seem to require more "seed" money to help start funds. While size of start-ups was not a focus on for survey, it seems that growing hedge fund businesses will take time. There is no easy money in the competitive hedge fund industry.