Sat, Jan 21, 2017
A A A
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Industry Updates

HFR: Hedge fund launches declined through mid-2012; 245 in 2Q, down from 304 in 1Q

Thursday, September 13, 2012
Opalesque Industry Update – Hedge fund launches declined through mid-2012, as managers prepare for increased reporting requirements and investor demand for institutional infrastructure continues to increase, according to HFR, the global leader in the indexation, analysis and research of the global hedge fund industry. According to today’s release of the HFR Market Microstructure Industry Report, hedge fund launches totaled 245 in 2Q12, down from 304 in the prior quarter and representing the lowest quarterly launch total since 4Q10.

Hedge fund liquidations also declined from the prior quarter to192 funds, although 1H12 liquidations exceeded the first half of 2011 by 14 percent.

Industry performance declined in 2Q12, with the HFRI Fund Weighted Composite Index falling -2.8 percent for the quarter, though performance improved through August-end, with the Index gaining +1.7 percent in the first two months of the third quarter.

Performance dispersion between the best and worst performing funds also narrowed in 2Q, with the top decile of HFRI constituents reporting an average gain of 7.0 percent, while the bottom decile reported an average decline of -16.2 percent, creating a top-bottom decile dispersion of 23.2 percent. In the trailing 12 months ending 2Q12, the top decile of funds reported an average gain of 18.4 percent while the bottom reported an average decline of -31.1 percent, a dispersion of 49.5 percent. Comparatively, in the volatile years of 2008 and 2009, dispersion between best and worst performing deciles exceeded 100 percent.

With minor fluctuation between strategies, average management fees industry-wide remained unchanged at 1.57 percent, although management fees for hedge funds launched in 2012 rose to 1.65 percent. Similarly, incentive fees rose industry-wide by 4 basis points to 18.76 percent, while incentive fees for funds launched in 2012 rose to 18.23, a 15 basis point increase over fees for funds launched in 2011. Nearly 40 percent of all funds charge management fees between 1.51 and 2.0 percent, while over 80 percent charge incentive fees between 16 and 20 percent.

“New fund launches through mid-2012 declined from the prior year as a result of three factors: weak performance in 2Q12, continued low levels of investor risk tolerance and uncertainty surrounding increased reporting requirements and infrastructure costs,” stated Kenneth J. Heinz, President of HFR. “Despite total hedge fund industry assets rising to a record level of $2.14 trillion in the first half of 2012, the capital raising environment continues to be challenging, particularly for small to mid-size funds. Increased certainty about regulation, reporting and marketing, as well as a normalization of investor risk tolerance, is likely to result in more fund launches and improved capital raising conditions through the second half of the year.”

(press release)

HFR (Hedge Fund Research, Inc.) is the global leader in the alternative investment industry, specializing in the indexation and analysis of hedge funds. www.hedgefundresearch.com

Bg

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 - This hedge fund made 37% betting on banks in 2016 and remains bullish after the Trump rally, Hedge fund legend David Einhorn is making a big bet on GM, After impressive 85% return in 2016, hedge fund looks to Canadian gold producer, small banks[more]

    This hedge fund made 37% betting on banks in 2016 and remains bullish after the Trump rally From Forbes.com: Can bank stocks continue to rise after a 28% surge in the KBW Bank Index in 2016, fueled by a post-election rally as stock pickers returned to the beaten down sector? Forget the s

  2. SWFs - China sovereign wealth fund CIC plans more U.S. investments[more]

    From Reuters.com: China Investment Corporation (CIC), the country's sovereign wealth fund, is looking to raise alternative investments in the United States due to low returns in public markets, its chairman said on Monday. CIC will boost its investments in private equity and hedge funds as wel

  3. Some hedge funds strong start in 2017 nice contrast to 2016[more]

    With the 2016 HSBC Hedge Weekly performance rankings in the books - a year in which the same leader-board entries pretty much dominated unchallenged throughout the year - comes a new leader board that is a hard-scrabble mix of hedge fund styles and categories. What is clear after but a few short wee

  4. Macro hedge funds and CTAs outperform in December on strong dollar[more]

    Komfie Manalo, Opalesque Asia: The last month of 2016 saw risk assets climbing higher, as part of expectations that the new U.S. administration will remove barriers to growth and investment, Lyxor Asset Management said. December also saw the Fed hik

  5. Opalesque Exclusive: Roxbury credit events UCITS gathers more assets[more]

    Benedicte Gravrand, Opalesque Geneva for New Managers: The Roxbury Credit Events Fund, launched in September 2015, was up 4.24% in 2016, having returned seven positive months during the year. The managers raised