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What Does It Take for a New Hedge Fund to Make It? $250 Million

  • Launches below that level have a 50-50 chance of survival
  • Goldman report details the tough environmment managers face
Commuters exit the Wall Street subway station near the New York Stock Exchange (NYSE) in New York.
Photographer: Michael Nagle/Bloomberg

For a baby sea turtle there’s a 1 in 1,000 chance of making it to adulthood. If you’re starting a hedge fund, the odds may look just as daunting.

Only the fittest survive in the fund business -- and that means starting up with at least $250 million, according to a report from Goldman Sachs Group Inc. that’s making the rounds on Wall Street. It’s a tough bar, made all the more challenging by today’s volatile markets, mounting set-up costs and investors who are tightening their purse strings.