Emerging hedge fund firms facing many roadblocks

A Castle Hill Capital Partners Co-founder and Senior Managing Director was featured in recent Pensions & Investments story on emerging manager capital raising.

New hedge fund launches are declining in one of the most difficult fundraising environments managers have faced since the global financial crisis.

“Fundraising is extremely tough for hedge funds in the ninth year of a bull market,” said Andrew Saunders, senior managing director at Castle Hill Capital Partners Inc., New York, a specialist consultant to hedge funds.

Mr. Saunders said hedge fund fees are being pushed down and it’s hard for a small manager to “keep the lights on” when the desired fee formula from investors is no management fee and a 10% performance fee.

“Seeding at 2% and 20% is much different than zero and 10%. Managers could always model their expenses at 2% and figure out how to stay in business, but how do you model zero?” Mr. Saunders queried.

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Castle Hill Capital raises capital for alternative investment strategies by combining creativity, collaboration, and effort supported by rigorous process. Leveraging our experience in investment management and strategy execution, we provide all our partners – buy and sell side- with relevant introductions and idiosyncratic, differentiated investment opportunities. To learn how we can help you raise capital, please contact us.

Mary Beth GlaccumPensions & Investments quote