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Alternative Market Briefing

Hedge fund universe grows with 127 funds launching and 100 closing in Q3 while fees fall

Tuesday, January 02, 2024

Matthias Knab, Opalesque:

New hedge fund launches and liquidations were steady into the fourth quarter as managers positioned for the peak of generational inflation and the conclusion of aggressive interest rate increases which have dominated the past two years. The estimated number of new hedge fund launches in 3Q23 was steady at 127, a narrow decline from the prior quarter of 133 in 2Q23, bringing the YTD total to an estimated 353 launches thus far in 2023, according to the latest HFR Market Microstructure Report, released today by HFR, the established global leader in the indexation, analysis and research of the global hedge fund industry.

The number of hedge fund liquidations was also steady in 3Q23, with closures falling slightly to as an estimated 100 funds in 3Q23, a slight decline from the prior quarter estimate of 109 liquidations. In the trailing twelve-month period ending 3Q23, an estimated 449 funds launched, while an estimated 455 funds liquidated.

The HFRI Fund Weighted Composite Index (FWC) advanced +4.8 percent YTD through November, led by the recent surge in Equity Hedge and Event Driven strategies, and complemented by steady gains in Relative Value Arbitrage. The HFRI Equity Hedge (Total) Index advanced +6.6 percent YTD through November, the HFRI Event-Driven (Total) Index gained +6.0 percent YTD, and the HFRI Relative Value (Total) Index added +5.9 percent YTD through November.

The performance dispersion of the HFRI Fund Weighted Composite Index......................

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