Costs, regulations push Europe’s hedge fund minnows to platforms


LONDON, June 14 (Reuters) – For Rory Powe, running your own hedge fund wasn’t all it was cracked up to be. In 2014, after 12 years building his business, Powe, 52, moved with his Powe Capital Management fund to join Man Group, the world’s biggest listed hedge fund firm.

Driven by rising costs and mounting regulatory pressure, he is one of an increasing number of fund managers to abandon their own firms in Europe. Thirty three hedge funds have shut down so far this year – more than in Asia or the United States – on top of a record 370 last year, data from Eurekahedge showed.

While some will have retired, returned to banking or left the industry, others are following Powe and seeking an easier and less costly path to companies such as Man Group, BlueCrest, Millennium and Balyasny.

Unlike a traditional hedge fund led by one fund manager, such platforms host multiple managers under their existing brands and provide them trading infrastructure, legal, compliance and marketing support and in some cases capital.

Though technically an employee, such managers take a significant cut in the fees generated, with some platforms also allowing them to spin out at a later stage.