A former Bear Stearns Asset Management senior managing director has started a fund with almost $1 billion (628.8 million) in assets under management following the worst first-half performance for hedge funds in nearly two decades and a decline in hedge fund start-ups, The Wealth Bulletin reports.
Melissa Kos hedge fund, Covepoint Capital, is based in New York. Ko led one of Bear Stearns best-performing hedge funds, a $2.5 billion emerging macro fund that had returns ranging from 45% to 25% between 2005 to 2007, according to Reuters.
Other BSAM veterans have also had launches such as Richard Werner, formerly a fund manager at BSAM, who established his own alternative asset management business. Werner launched Providence Asset Management in the UK in May after managing Bear Stearns’ Global Alpha fund, which was started in February 2006.
Industrywide, returns for the six months through June were 0.75% for US hedge funds, according to data provider Hedge Fund Researchs HFRI Fund Weighted Composite Index, the benchmark that reflects the average performance of all hedge funds on its database. It was the worst first-half in 18 years, according to HFR.
Hedge funds targeting emerging markets were hard hit by the downturn in the equities markets, particularly in Asia except Japan.
Although there were 35 hedge fund launches in the first six months of this year, it was half of what it was a year ago. In addition, the size of the launches are much larger with big companies such as Goldman Sachs accounting for 70% of the assets under management.
Goldmans asset management arms funded two launchesGoldman Sachs Investment Partners, based on an equity long/short strategy, and Goldman Mortgage Credit Opportunities, focused on mortgage-backed securities. They accounted for $8.1 billion of the $19.5 billion in assets for new hedge fund launches.