Leading U.S. law firm, Seward & Kissel, released its 2012 edition of the “New Hedge Fund Study” last month. The study reflects data on newly formed hedge funds sponsored by U.S. managers, which have entered the market in 2012, and covers launches of Seward & Kissel’s new clients from 2012. The data reflects some important information and points that can be relevant for the hedge fund industry at large.
“The study analyzed investment strategies, incentive allocations/management fees,liquidity and structures, as well as whether any form of strategic capital was raised. The study did not cover managed account structures or funds ofone that may have a wider variation in the fee arrangements and/or other terms,” the law firm said in the report.
Seward & Kissel was founded in 1890 and has earned an excellent international reputation since then. Its primary practice focuses on corporate and litigation work. The firm is well known for representing major commercial banks, investment banking firms, investment advisers and related investment funds (including mutual funds and hedge funds), broker-dealers, institutional investors and transportation companies (particularly in the shipping area).
Some highlights of the study include the fact that of the total funds, 64% had equity or equity-related strategies, and non-equity strategies involved higher allocations for management fees. Also, the study has revealed that in 2012, more funds allowed monthly buybacks in comparison to the previous year.
Seward & Kissel said in its study that most offshore funds were established in the Cayman Islands, and sponsors of both U.S. and offshore funds set up master-feeder structures over 80% of the time. Another point was about the seed money funding, which in many of the larger deals, was at least $75 million, and up to $50 million in the case of smaller deals.
We have gathered all the key findings of the study in this article, check them out: