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Hedge fund start-ups struggle for assets as investors favor giants

Covara Capital, backed with $250m by Blackstone, manages about $265m after a year, underscoring how hard it is for new managers to win institutional allocations.

Reported · Written up by our desk · Hedge Funds

Hedge fund start-ups are finding it increasingly difficult to raise assets as more investors concentrate capital in large, established multi-strategy managers, according to a Bloomberg report cited by Hedgeweek.

Hedgeweek says that even experienced portfolio managers can struggle to attract significant external assets. It highlights Covara Capital, launched by Sachin Gupta after his previous hedge fund closed, which started with $250m in seed capital from Blackstone but manages about $265m after roughly a year.

The story also points to a broader slowdown in new launches, citing Adam Blitz, a hedge fund investor at Evanston Capital Management. Blitz estimates the number of new hedge fund launches has fallen by about half over the past five years.

According to Hedgeweek, the industry’s largest firms have continued to attract substantial inflows, making it tougher for newer managers to compete for institutional allocations.

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