In the good old days, just two or three years ago, when hedge fund routinely returned in the double digits, start-up hedge funds would attract about 25% above target on their first day. Not anymore. In fact, newbies are finding it more difficult to attract investors, according to a Morgan Stanley survey. Ironically, this new reality comes as institutional investors are plunking down huge wads of cash with hedge funds. The survey concluded that these investors are more likely to throw their money to traders or fund managers with a hot track record, and less likely to go with unproven talent. About half of new hedge funds focusing on multi-arbitrage and long/short equity with targets of under $100 million missed their goals, says the study, while long/shorts looking for more than $100 million just barely hit their targets. According to the survey of U.S. institutions, respondents said they were shying away from convertible arbitrage, distressed, fixed income and multi-strategy, and placing their bets in sectors such as energy, technology, healthcare, real estate and utilities.