Tue, Oct 13, 2015
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Industry Updates

HFR: Fewest fund of funds liquidations since 1Q08, performance dispersion narrows from record levels

Wednesday, September 15, 2010
Opalesque Industry Update - Hedge fund industry liquidations returned to pre-financial crisis levels in the second quarter (2Q10), according to data released today by Hedge Fund Research, Inc. (HFR), the leading provider of hedge fund industry data. Led by steady performance, a return of new investor capital and greater clarity around financial reform legislation, hedge fund liquidations fell to 177 in 2Q10, bringing the total number of fund closures to 417 in the first six months of 2010. For the quarter, the fund attrition rate, defined as the number of liquidations as a percentage of the overall number of funds, dropped to below two per cent. Funds of Hedge Funds (FOFs) experienced the fewest number of liquidations (54) since 1Q08; since the start of the financial crisis, over 800 FOFs have liquidated, reducing the number of FOFs from nearly 2,600 in mid-2008 to approximately 2,100 as of 2Q10.

Fewer Funds Launched as Investor Preference for Top Firms Continues
New hedge fund launches also declined in 2Q10, with only 201 funds launching, the lowest level since 2Q09; by strategy, Equity Hedge and Macro experienced the greatest number of new launches. During the first half of 2010, investors exhibited a clear preference for the industry's most established firms, allocating nearly all of the $23 Billion of new investor capital to firms with greater than $5 Billion in assets under management (AUM). These firms currently control approximately 60 percent of all hedge fund industry capital.

Fund Performance Dispersion Gap Narrows
Performance dispersion amongst hedge funds declined from record levels with 69 percent separating the best and worst performing deciles of funds for the 12-month period ending 2Q10. The top decile of hedge funds averaged a return of 52.2 percent during this period, while the bottom decile lost 16.8 percent. Performance dispersion had reached a peak level of over 130 percent in the 12-month period ending 1Q10.

"Volatility returned to financial markets in 2Q10 as investors lowered expectations of the global economic recovery," said Ken Heinz, President of Hedge Fund Research. "Despite this volatility, fewer funds have liquidated recently as a function of steady performance, improved structural integrity and renewed investor confidence in the hedge fund industry."

(press release) About HFR
Hedge Fund Research, Inc. (HFR) is the global leader in the alternative investment industry. Established in 1992, HFR specializes in the areas of indexation and analysis of hedge funds. HFR Database, the most comprehensive resource available for hedge fund investors, includes fund-level detail on historical performance and assets, as well as firm characteristics on both the broadest and most influential hedge fund managers. HFR has developed the industry's most detailed fund classification system, enabling granular and specific queries for relative performance measurement, peer group analysis and benchmarking. HFR produces over 100 indices of hedge fund performance ranging from industry-aggregate levels down to specific, niche areas of sub-strategy and regional investment focus. With performance dating back to 1990, the HFRI Fund Weighted Composite Index is the industry's most widely used standard benchmark of hedge fund performance globally. The HFR suite of Analysis Products leverages the HFR Database to provide detailed, current, comprehensive and relevant aggregate reference points on all facets of the hedge fund industry. HFR also offers consulting services for clients seeking customized top-level or more nuanced analysis. For the hedge fund industry's leading investors and hedge fund managers, Hedge Fund Research is The Institutional Standard.

What do you think?

   Use "anonymous" as my name    |   Alert me via email on new comments   |   
Today's Exclusives Today's Other Voices More Exclusives
Previous Opalesque Exclusives                                  
More Other Voices
Previous Other Voices                                               
Access Alternative Market Briefing

  • Top Forwarded
  • Top Tracked
  • Top Searched
  1. Investing - AQR Capital and Renaissance Technologies raise stakes in Southwest Airlines[more]

    From Marketrealist.com: In the previous part of this series, we saw how institutional investors played Southwest Airlines (LUV) in 2Q15. Now let’s move on to the trades executed by key hedge funds in Southwest Airlines over the same period. … Most of the hedge funds that had significant exposu

  2. Manager Profile - Pimco alternative funds flourish as 30-year bond rally fades[more]

    From Bloomberg.com: Inside Pacific Investment Management Co., the bond behemoth that lost two chief investment officers last year and saw almost $500 billion of client money leave, a hidden profit engine is easing some of the pain. For more than a decade, Newport Beach, California-based Pimco has qu

  3. Niche Investing - Art investment funds: Attracting institutional and other new investors[more]

    From Mondaq.com: The Deloitte/ArtTactic Art and Finance Report 2014 (the "Art and Finance Report") noted that the "global art investment fund market was estimated to be worth at least $1.26 billion in the first half of 2014." This seems almost inconsequential when juxtaposed with the $54 billion of

  4. Hedge fund Barnegat survives September’s market selloff[more]

    Komfie Manalo, Opalesque Asia: Bob Treue’s $679 million Barnegat Fund proved resilient after another month of market letdown as the hedge fund gained 2.2% last month, bringing its year-to-date gains to 2.8%. Treue said in his monthly report to i

  5. …And Finally - Japanese men want upgrade on their virtual girlfriends[more]

    From Newsoftheweird.com: Five years after News of the Weird mentioned it, Japan's Love Plus virtual-girlfriend app is more popular than ever, serving a growing segment of the country's lonely males -- those beyond peak marital years and resigned to artificial "relationships." Love Plus models (Rinko