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Alternative Market Briefing

Opalesque Roundup: New hedge fund launches continue to fall as corona crisis kicks in: hedge fund news, week 27

Monday, July 06, 2020

In the week ending July 3rd 2020, HFR said that new hedge fund launches declined to a near-record low in 1Q20, as the beginning of the global coronavirus pandemic and ensuing lockdowns drove intense volatility across asset classes, steep equity market declines, and near-record lows in investor risk tolerance. New hedge fund launches totaled an estimated 84 in 1Q20, the lowest quarterly estimate since the Financial Crisis in 4Q08.

Meanwhile, active managers have seen significant outflows this year, although they are beginning to taper off - data from eVestment shows that investors pulled $18.1 billion out of hedge funds in April, down slightly from the $24 billion investors pulled from the industry in March.

According to Lyxor, the cyclical rally is losing steam, but the positive market performance continued to provide a tailwind to the more directional strategies, including L/S Diversified and Special Situations strategies - distressed hedge funds typically purchase distressed debt at a deep discount and seek to profit as companies turn around.

In new launches, the global alternati......................

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