Expect more hedge funds to pop up this year.
A recent survey of hedge funds found that most (82%) expect more fund launches this year compared to last. And less than 20% predict more closures in 2010 than in 2009.
The survey, conducted in the spring for Rothstein Kass, an accounting and professional service firm based in New York, had 381 respondents.
Data justify the cautious optimism among fund managers. Last year, 784 new fund launched and this year's numbers are on pace to exceed that, according to figures from Hedge Fund Research Inc., a Chicago-based fund analysis organization. In the first quarter, 254 new hedge funds were launched, compared to the 148 in the first quarter of 2009.
Despite the finance industry's clamor against looming regulation, provisions such as the Volcker rule would mostly be a good thing for hedge funds. Fund managers believe limiting holding banks' proprietary hedge-fund operations could free up competition and allow hedgies greater influence.
The Volcker rule would also accelerate the trend of investment managers leaving banks to start their own hedge funds and other firms.
"There's more talent leaving investment banks in the last six months than before," said Howard Altman, co-CEO and co-managing principal of Rothstein Kass, which specializes in hedge-fund customers. "It'll be interesting to observe how this will come to fruition."
Write to Sindhu Sundar
