March 24, 2016 / 9:46 AM / 3 years ago

Lone Pine-backed hedge fund to launch in London - sources

LONDON (Reuters) - Lone Pine Capital senior analyst Ran Li is to start a new London-based equities hedge fund backed by the U.S. firm, sources with direct knowledge of the matter told Reuters, in what could prove one of the year’s biggest European launches.

Li is expected to launch Half Sky Capital with at least $110 million, two sources said, while a third source said the fund will easily reach several hundred million dollars and mirror the success of previous Lone Pine spin-outs.

Lone Pine, which manages about $16 billion across equity markets globally, will back the launch with start-up capital, two sources said.

The U.S. hedge fund firm declined to comment and Li, who continues to work in its London office, did not respond immediately to requests for comment.

“This will be one of those things that really captures the imagination of investors and I think you’re going to see multiple hundreds (of millions), at the very least,” the third source said of the proposed new fund.

Half Sky Capital, which will buy and sell stocks in global companies, is likely to begin operating in about six months, the source added.

The decision to launch Half Sky Capital comes as the barrier to sector entry continues to rise amid weak average performance, higher regulatory costs and a move by many large institutions to invest more money with larger existing funds.

As a result, hedge fund liquidations hit a seven-year high of 979 in 2015, Hedge Fund Research data showed.

Lone Pine, run by star trader Stephen Mandel and itself a spin-out from billionaire Julian Robertson’s Tiger Management, has previously spawned four fund firms, but Half Sky Capital would be the first in Europe.

Three out of the four Lone Pine spin-outs reached $1 billion or more. They were Conatus Capital Management and White Elm Capital, both launched in New York in 2007, and Hong Kong-headquartered Tybourne Capital Management, launched in 2012.

Additional reporting by Lawrence Delevingne; Editing by David Goodman

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