HFR: 1H-2008 saw 350 HF liquidations (up 15%), less than 500 launches

Discussion in 'Professional Trading' started by ASusilovic, Sep 20, 2008.

  1. From HedgeFundResearch.com: Volatile financial markets continued to impact the hedge fund industry in 2Q 2008, contributing to over 180 hedge fund liquidations for the quarter, according to data released today by Hedge Fund Research, (HFR), a leading source of hedge fund information and performance data. The first half of the year saw 350 funds liquidate, an increase of 15 percent over the 1H 2007 total of 303. At the current rate, a total of 700 funds would close for the year, (approximately seven percent of the industry) an increase of more than 24 percent over the 2007 total of 563. The record year for hedge fund liquidations was 2005, a year in which nearly 850 funds closed.

    New hedge fund launches slowed in the quarter, with only 240 new funds opening. Fewer than 500 funds launched in 1H 2008, a pace that, if continued, would result in the lowest number of new fund introductions since 2001. HFR estimates over 10,200 hedge fund vehicles currently exist, managing over $1.93 trillion in investor capital as of 2Q 08.

    Throughout the entire hedge fund industry, 240 new funds were started in 2Q 08, while 180 were shut down. This compared to 247 fund launches and 170 liquidations in 1Q 2008. Through 1H08, the hedge fund industry experienced an overall attrition rate of -3.46 percent, which is likely to approach -7.0 percent for the full year, an increase from the rate of -5.95 percent for 2007. The attrition rate is the percentage of funds which liquidated during the period over the total number of funds as of the beginning of the year. Excluding growth in funds of hedge funds, the total number of single-manager hedge funds fell again in the second quarter, marking the first time the number of these funds has declined in two sequential quarters. A total of 147 new single-manager funds were launched in 2Q 2008, while 157 were liquidated….All analysis contained herein is available in HFR's latest quarterly research report entitled HFR Market Microstructure Hedge Fund Industry Report - Q2 2008