During the bull market, there was a certain cliché that it would take just two men and a Bloomberg terminal to set up a hedge fund. Costs would be minimal and, all in, managers might get going with a just a few million dollars under management.

Since then, investors and regulators have become somewhat more demanding. Investors have stepped up the pressure for increased reporting and a wider range of prime broking relationships to spread the risks, while also squeezing fees in the hope of better returns. New regulatory burdens have piled on costs in compliance and monitoring, all of which mean start-up funds need a much bigger pot of money to get started.