Fairfield County Business Journal Hedge funds bounce back
Hedge funds bounce back
Even as Greenwich and Stamford enjoy a rebirth of financial industry jobs via hedge funds and private equity firms, the sector is bracing itself for potential new regulations and taxes that could limit future growth.
In 2009, hedge funds had their best results since 2003 with a 20 percent gain on average globally, according to Singapore-based Eurekahedge and Chicago-based HedgeFund.net, which publish indexes on thousands of hedge funds globally. The latter company noted the stock of corporations on the S&P 500 produced a better return on average, however, at more than 26 percent.
Fairfield County is home to one of the largest concentrations of hedge funds in the world, and also has a significant number of private equity firms, including the newly formed Weld North L.L.C. in Greenwich.
“They are back,” said Bob Ageloff, a commercial real estate broker with Jones Lang LaSalle in Stamford. “A lot of the hedge funds that had retrenched have produced offshoots, startups … This time around, there seems to be a lot more activity in Stamford as opposed to two (or) three years ago, when Greenwich was getting most of (the activity).”
While 80 percent of hedge funds had positive returns last year according to results reported to HedgeFund.net, just 23 percent could say the same for both 2008 and 2009. That is an important measure, according to HedgeFund.net, as it represents the typical length of lockup periods that restrict investor withdrawals.
Despite the extreme volatility in the financial markets in the past few years, just 7 percent of pension fund managers polled by Hewitt Associates said they planned on reducing their use of alternative investment vehicles, in a survey released in late January. Nearly 80 percent of respondents planned no change to their policy on hedge funds; 14 percent plan to increase the assets they place in alternative investments.
The industry is waiting on tenterhooks as the U.S. government and others consider measures to increase transparency and regulatory powers in the financial industry.
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