UK hedge fund managers defy Europe slowdown

BY Matt Atkins

The majority of European hedge funds to set up business in recent years have done so in the UK, according to a Preqin's Hedge Fund Analyst factsheet. The UK accounted for 50 percent of European hedge fund launches in the past 12 months.

Europe decelerates

While hedge fund managers in France, Spain and Germany saw a net decrease in assets under management (AUM) between January 2013 and April 2014, UK-based fund managers witnessed an increase of approximately $57bn. “Europe is experiencing a slowdown in terms of new hedge fund managers setting up business in contrast to North America, which has seen an increase in the number of new fund managers coming into market in recent years,” says Amy Bensted, head of Hedge Funds Products at Preqin. “This can be partially attributed to the AIFMD regulation within Europe, which is deterring some prospective new firms setting up a hedge fund business in the region. However, one country within Europe shows no signs of sluggishness – the UK.” Firms with headquarters in the UK now account for $423bn in hedge fund assets – over 10 times the amount of any of its European neighbours.

Prolific 2013

Last year proved particularly prolific for hedge fund manager launches in the UK. Thirty-eight new groups set up business in the country, compared to 17 throughout the rest of Europe. Despite this, the number of hedge fund launches in each region has remained broadly similar, with 91 in the UK, compared to Europe’s 90. But while the UK far outstrips all other European countries in terms of AUM, it is a Sweden headquartered fund manager that has had the most success in fundraising new vehicles: Brummer & Partners’ Canosa fund has amassed over $1bn in assets since its March 2013 launch.

Expected developments

Going forward, the continued growth of UK hedge funds is likely, while continental Europe must do more to attract business, says Ms Bensted. “Over the course of the rest of 2014 it will be interesting to see if UK continues to see increasing volumes of new manager launches and if regulation and other hurdles continue to hinder start-ups in the rest of Europe.”

Press Release: UK Hedge Fund Industry Booms Despite a Wider Slowdown in Europe

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