Tue, Sep 1, 2015
A A A
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Industry Updates

Hedge fund launches tracking 2011 levels, 275 in Q3

Tuesday, December 11, 2012
Opalesque Industry Update: New hedge fund launches and liquidations maintained the pace of recent quarters in 3Q12 despite the overhang of macroeconomic risks, political uncertainties and anticipated regulatory changes, according to data released today by HFR, the leading provider of indexation, research and analysis for the global hedge fund industry. Hedge fund launches totaled 275 in 3Q12, an increase from 245 in the prior quarter, bringing total launches in the trailing 12 months to 1,094 funds, slightly below the 2011 launch total of 1,113 fund openings. Hedge fund liquidations increased to 211 in 3Q12, an uptick from the 192 liquidations in 2Q12, bringing total liquidations to 825 in the trailing 12 months, slightly ahead of the 2011 total of 775 fund closings.

Concurrent with total hedge fund industry assets reaching a record level of $2.2 Trillion, the total number of single-manager hedge funds also reached a record level of 7,867 funds in 3Q12. However, in contrast to this trend, and indicative of an increased propensity for investors to invest directly into hedge funds, the total number of Funds of Hedge Funds (FOF) in existence declined to fewer than 1,900, a level not seen since 1Q05. Launches in both Macro and Relative Value Arbitrage (RV) strategies exceeded launches in Equity Hedge for the first time in 3Q12, with over 100 new Macro funds and over 70 new RV funds launching in 3Q12, compared to 60 launches in Equity Hedge. Steady fund performance by RV strategies over the past four years has continued to attract new investor capital, with total assets in RV increasing to $586 Billion, equaling the amount of capital invested in Equity Hedge strategies.

After narrowing throughout 2011, performance dispersion between the top and bottom deciles of hedge funds increased in the trailing 12-month period ending 3Q12, with the top decile of funds averaging a gain of +34.0 percent and the bottom decile averaging a decline of -18.9 percent, creating a top/bottom decile dispersion of nearly 53 percent.

The industry-wide average management and incentive fees both declined as of 3Q12, with the average management fee falling 1 bps to 1.56 percent and the average incentive fee falling 14bps to 18.62 from the prior quarter. Meanwhile, the average fee structure of funds with assets greater than $1 Billion was slightly higher, averaging a 1.60 percent management fee and an 18.65 percent incentive fee.

“Recent hedge fund launches reflect the dynamic evolution of the entire hedge fund industry since 2008, with investor preferences shifting away from equity market beta and funds of hedge funds, and towards Macro and Arbitrage strategies which are able to accommodate the demand for transparency, liquidity and cost sensitivity of institutional investors,” stated Kenneth J. Heinz, President of HFR. “Hedge fund launches continue to be strong into year-end despite continued prospects for regulation and political uncertainty as a result of increased demand from institutional investors facing the challenge of achieving required rates of return through the current environment of low fixed income yields and high equity market volatility. Despite its record levels of growth, the hedge fund industry still represents only a fraction of total global capital base, which is likely to grow exponentially in coming years as both institutional and individual investors incorporate alternatives into their existing allocations.”

HFR

Press Release

BM

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. Activist News - Carl Icahn has snapped up a huge stake in Freeport-McMoRan, and the stock is ripping, Meet Europe's best activist investor[more]

    Carl Icahn has snapped up a huge stake in Freeport-McMoRan, and the stock is ripping From Businessinsider.com: Carl Icahn has picked his next target: Freeport-McMoRan. Icahn and a group of other investors have snapped up an 8.46% stake in mining company Freeport-McMoRan, according to a j

  2. North America - Hedge fund manager Ray Dalio’s challenge to the Fed[more]

    From Newyorker.com: For some reason, Janet Yellen, the chair of the Federal Reserve, decided to skip this year’s annual Fed conference in Jackson Hole, where monetary policymakers from the United States and abroad get together with some prominent academics to discuss the big issues of the moment. Th

  3. Opalesque Exclusive: Credit-focused hedge fund Numen Capital expects more volatility in Europe in coming months[more]

    Benedicte Gravrand, Opalesque Geneva: A London-based hedge fund, which has just hired two emerging managers, is cautious on Europe. Vassilis Paschopoulos and former Lehman’s colleague Nikos Kargadouris, launched a London-based credit-focused hedge fund called

  4. Performance - Hedge funds bruised by stocks’ meltdown, Capstone’s volatility hedge fund is having a monster month thanks to market mayhem[more]

    Hedge funds bruised by stocks’ meltdown From WSJ.com: Hedge-fund managers like to promise their investors protection from market swings. In the recent stock swoon, many were caught off guard. Billionaire managers such as Leon Cooperman, Raymond Dalio and Daniel Loeb are deeply in the red

  5. Opalesque Exclusive: Foundation returns slide, but commitment to alternatives remains[more]

    Bailey McCann, Opalesque New York: Private and community foundations posted returns of 6.1 percent for the 2014 fiscal year (January 1 – December 31, 2014), down from the 15.6 percent return reported for FY2013, according to the latest Council on Foundations–Commonfund Study of Investment of End

 

banner