The PricewaterhouseCoopers/Alternative Investment Management Association Global Hedge Fund Distribution Survey found that 44 per cent of the 146 respondents planned to launch a new hedge fund in 2015-16.
Firms based in the UK and US were “considerably more likely” to launch new hedge funds than firms in continental Europe and Asia Pacific, the report found.
“However, in interviews with UK and US firms, it is clear that interest in hedge funds from EU institutions is starting to heat up, particularly in Italy and Germany,” said the report.
As a result, more hedge funds could end up being launched within the eurozone, said the report.
Larger hedge funds, or those with more than US$500 million in assets under management (AUM), are more likely to launch a new hedge fund than those with less that US$500 million in AUM.
“Nearly half of the new funds to be launched are expected to be established in the Cayman Islands, with nearly a quarter in Ireland, 12 per cent in Luxembourg and 10 per cent in the US,” said the report.
“The biggest obstacles to a successful hedge fund launch, according to the survey responses, are investor appetite for the strategy and the regulatory burden.
“To a lesser extent, firms are worried about market trends, investor appetite for hedge funds in general and the ability for the fund to generate fees which exceed its costs,” said the report.
Only 17 per cent of Australian respondents said they anticipated launching a new hedge fund in 2015-16.
