Monday, May 27, 2024

SurgoCap’s $1.8bn raise defies record low in hedge fund launches

  • 71 hedge fund launches while 145 closed in Q3, according to HFR
  • But ex-Lone Pine Mala Gaonkar’s $1.8bn launch has boosted sector
  • Read AFI’s exclusive report on launch activity here and our rolling log here

Hedge fund launches hit a 14-year low in the third quarter, but the $1.8bn raised by SurgoCap Partners shows leading start-ups remain an investor draw.

Just 71 new funds got underway in the third quarter, down from 80 in Q2 and the lowest figure since the fourth quarter of 2008 during the financial crisis, according to Hedge Fund Research.

But the hedge fund start-up scene started the year with a boost as Mala Gaonkar, who spent 24 years at Lone Pine Capital, started her New York-based firm with $1.8bn.

SurgoCap, which trades across sectors and focuses on how technology can improve companies, is the largest ever woman-led hedge fund launch, according to Bloomberg.

As more data shows allocations heading into multi-strategy funds, the strong fundraise signals that there is abundant investor appetite for the top hedge fund start-ups with the most experience and best prospects.

For the majority, fundraising is hard going and there are fewer managers are taking the start-up risk.

Chicago-based HFR said 145 hedge funds closed their doors in Q3, meaning there was a net reduction of 74 hedge funds. 

The data provider puts hedge fund industry assets at $3.78tn as of end-Q3, down from a peak of $4.01tn two years prior.

There were 9,163 hedge funds in the industry as of Q3, down from a peak of 10,142 at the end of 2014.

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