Sat, Jun 25, 2016
A A A
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.
(www.hfr.com)
KM

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. Opalesque Roundup: Hedge funds shrink as liquidations outpace new launches in Q1: hedge fund news, week 27[more]

    In the week ending 17 May, 2016, HFR said hedge fund liquidations declined narrowly to begin 2016 after rising sharply to conclude 2015, as investors positioned f

  2. Europe - Hedge funds keep powder dry over big Brexit bets, Hedge funds sense profit in Europe shock waves after Brexit vote, Soros warns Brexit may cause pound plunge worse than Black Wednesday, After Brexit: What will happen if Britain votes to leave the UK?[more]

    Hedge funds keep powder dry over big Brexit bets From FT.com: Hedge funds are shying away from big bets on Brexit, with many unwilling to risk further losses having already suffered a painful first half of the year. With the outcome of a UK vote on the country’s membership of the Europea

  3. News Briefs - ’Flash Boys’ get green light to launch stock exchange, Pimco says ‘storm is brewing’ in U.S. commercial real estate, Bankers get ready to rumble at Hedge Fund Fight Night, AIMA Australia celebrates 15th anniversary[more]

    ’Flash Boys’ get green light to launch stock exchange In an investing environment ruled by fast, the newest U.S. public stock exchange is banking on slow. Well, slower. IEX Group, which won Securities and Exchange Commission approval on Friday to go head-to-head with the New York Stock E

  4. Blackstone buys minority stake in New York-based credit hedge fund Marathon[more]

    Benedicte Gravrand, Opalesque Geneva: Blackstone Strategic Capital Holdings Fund, a vehicle managed by Blackstone Alternative Asset Management (BAAM), has acquired a passive, minority interest in Marathon Asset Management, for an undisclosed sum. Based in New York,

  5. Global markets fell, hedge funds gain in mid-June on Brexit, Fed rate concerns[more]

    Komfie Manalo, Opalesque Asia: Global financial markets declined through mid-June, as uncertainty associated with the upcoming Brexit referendum and expected U.S. Fed interest rate hike contributed to increases in volatility across asset classes, data provider