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News December 6, 2004 Issue

How Many Hedge Fund Managers?

The SEC estimates that somewhere between 690 and 1,260 hedge fund managers will register as advisers under the new rule.

But at the SIA’s hedge fund conference last week, LeClair, Ryan attorney Lindi Beaudreault said that she’s hearing that "possibly as many as a third or so" of all unregistered hedge fund managers are seriously considering imposing a two-year lockup on their funds so as to avoid SEC registration. Beaudreault noted that the ability of a hedge fund manager to do this would depend on the manager’s business model: a distressed debt manager may have an easier time justifying a two-year lockup than a manager of a long/short equity fund.