Hedge funds are liquidating faster than new funds are launching. According to a report in Pensions&Investments online, Hedge Fund Research (HFR) released data on Friday showing that hedge fund managers are liquidating at record pace.
Hedge fund exits have outpaced launches for three straight quarters. Furthermore, the most recent two reported quarters saw the fewest number of launches since the fourth quarter of 2008.
The performance of equities has been a key driver of hedge fund launches since the number of liquidations peaked at 778 during the fourth quarter of 2008. This “risk-on” stance across the industry has created the longest run of hedge fund launches in history.
Pensions&Investments online quoted HFR’s president, Kenneth J. Heinz, predicting increased size of new funds. In addition, hedge fund investors seek liquidity, low fees and innovative strategies as they deploy capital.
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