r/finance • u/bloomberg • 8d ago
It’s a Tough Time to Launch a Hedge Fund
https://www.bloomberg.com/news/articles/2026-10-09/millennium-other-big-hedge-funds-crowd-out-new-launches-by-star-traders?accessToken=eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJzb3VyY2UiOiJTdWJzY3JpYmVyR2lmdGVkQXJ0aWNsZSIsImlhdCI6MTc5MTU1ODAxMywiZXhwIjoxNzkyMTYyODEzLCJhcnRpY2xlSWQiOiJUTU1YVDVSS1YyVEMwMCIsImJjb25uZWN0SWQiOiI5RjU0NjQ1MTM1QkI0NzcwODE4NTU4QzNFQUFCRDgyNSJ9.qNH7R4VAKTeuInSGiK8XXnqOOYBfkqqZS6WESreA-iM32
u/SpongEWorTHiebOb 8d ago
At the beginning of the year all the talking heads on Bloomberg were saying that this would be the year of the stock picker. The hedge fund stock pickers have gotten their asses handed to them again. Never trust anyone who wants to take a 1% to 3% asset management fee for investment advice.
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u/LowLifewitit 8d ago
Raising capital might honestly be harder than picking the right stocks. Investors need a reason to trust you with their money, especially when you’re new.
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u/danisanub Buy Side 7d ago
Tell me about it, I do it for a living haha. It also sucks when the market sours on your asset class or your investment team makes a mistake - you don’t have much control on what makes investors pass your products.
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u/Fragrant-Secret-8571 7d ago
exactly, and the trick is to boot‑strap a tiny seed round or a co‑investment that lets you build real‑world alpha—once you prove you can beat a benchmark you’re suddenly a *risk‑adjusted* package investors want the next big story for.
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u/Dangerous-Value-3211 6d ago
raising capital is literally a marathon of branding—buying names, not ideas. in a zero‑AUM world you’re basically telling gold‑miners you have the map to the next vein. the honest truth? most investors only touch a proven engine, a track record and an AUM that fits into a bigger house’s fee structure.
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u/bloomberg 8d ago
By Katherine Burton and Hema Parmar for Bloomberg News
In the world of hedge funds, coming from a big-name firm or getting a well-known backer used to almost guarantee a billion-dollar start, but Sachin Gupta’s less-than-stellar launch is endemic of a major shift in the industry: As the biggest hedge funds get even bigger, early-stage vehicles like Gupta’s are finding there’s scant financing left for newcomers.
“It’s harder to get a new fund off the ground,” says Adam Blitz, a longtime hedge fund investor whose Evanston Capital Management has farmed out about $4 billion to such firms.
The greatest challenge facing a would-be hedge fund titan today is that the largest firms keep expanding to previously unfathomable sizes, crowding out their smaller competitors. Each of the top 10 funds oversees at least $75 billion, and a few are nearing or have even surpassed $100 billion. Izzy Englander’s Millennium Management, for instance, just raised $22 billion, showing that investors would rather seek out an established player who reliably generates double-digit returns than try their luck with a newbie. Blitz estimates the industry is seeing half the number of launches it did just five years ago.
🎁Gift link: Read the full story here
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u/wouldntyouliketokno_ 8d ago
Kinda funny considering Ken Griffen said they could set the share prices to whatever they think they should be.
How do you lose money?
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u/BluebirdPractical442 6d ago
to actually get money, you need more than a tidy thesis—either a proven track record or a credible pedigree. the big guys will just edge you out if you look like a copy‑cat with no alpha. investors are still biased toward those that reliably hit double digits.
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u/Only_Statistician_21 8d ago
Hedge funds need a bear market, we've been in an equity bullrun for too long.