European hedge funds launches falter

The number of hedge fund launches in Europe declined to their lowest level in six years in the first half of 2008, according to a survey by EuroHedge, a part of HedgeFund Intelligence Ltd. of London. There were 106 hedge fund launches in Europe during that time, marking a 45% decrease from the first half of 2007. It was the lowest number since the first half of 2002, when 84 funds were launched. But despite economic weakness, just 50 funds closed during the first half this year, according to the report. European hedge funds raised $10.8 billion in the first half, marking the lowest first-half figure since 2004, when $9.4 billion was raised. The multistrategy/mixed arbitrage category had the greatest increase in assets with $4.5 billion, while the European long/short equity funds attracted $2.1 billion. “The global credit crunch and extreme turbulence across the financial markets have resulted in a sharp decline in the number of new hedge fund launches, and the capital raisings climate has become increasingly tough,” Neil Wilson, editorial director of Hedge Fund Intelligence, said in a statement.