More than 90% of hedge fund managers expect significant new capital to be invested in hedge funds this year despite turbulent markets, according to a survey released today by Rothstein Kass. But hedge fund managers will have to work harder to attract that capital: 89% of the 306 senior hedge fund executives interviewed early this month said marketing will be much more important to their success than it has been in prior years.
Also, 83% of those surveyed said competition for investors will intensify; 74% said attracting and retaining talented personnel will be harder for hedge funds; 74% foretold an increase in the number of funds launched this year compared to last year; and 67% said the cost of running a hedge fund will rise. By contrast, just 26% of hedge fund managers thought more hedge funds will close in 2008 than in 2007. Hedge fund managers also are remarkably sanguine about the prospect of increased regulation for their industry, with only 4% predicting a meaningful increase in new controls on their businesses. And despite negative performance in the first quarter for many hedge fund strategies, just 1% of managers surveyed said they think hedge fund fees will drop in 2008.