The number of European hedge funds increased by 15% in the first half of 2006, with 172 new HFs raising US$11.4 billion, according to EuroHedge. Despite the bigger number, however, total dollars raised was off more than 10%, from $13 billion last year to $11.4 billion. Long/short equity HFs have taken a hammering this year, but still accounted for nearly one-fourth of all the newbies, 41, compared with 36 a year ago. Bucking the downward dollar trend were the 32 new global equity funds, which launched with $1.6 billion, up from 24 and $575 million a year ago. The one strategy that has seen a dramatic drop in new offerings are credit hedge funds, which raised only $358 million for seven debuts, vs. $1.2 billion for 13 funds last year. EuroHedge suggests the drop off is due to massive losses and withdrawals in 2005 following downgrades at U.S. automakers, which resulted in a boost in yields of corporate bonds.
