European hedge fund returns diminishing

Investments in hedge funds are on the decline across the pond with new launches in Europe dropping for the first time this decade, according to the latest survey from EuroHedge magazine. There were 50 fewer launches in 2007 as compared to 2006 — 370 — for the first year-to-year fall since London-based EuroHedge began taking the survey in 2000. The survey also indicated that $33 billion was raised last year, an 11% drop from 2006. “The volatile and treacherous market conditions in the latter part of 2007 will have played a part in the overall slowdown- with the capital-raising climate in the second half of the year becoming increasingly tough,” said EuroHedge editor Nick Evans. The hedge fund strategy showing the biggest year-to-year increase was emerging market-equity, which more than doubled its assets from $2.5 billion assets in 2006 to $5.1 billion in 2007 according to the survey.