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Matthias Knab, Opalesque for New Managers: Hedge fund launches hit four-year high as volatility drives demand
New hedge fund launches accelerated into 2026 while liquidations remained near historic lows, as investors positioned for increasing geopolitical risk, AI and cryptocurrency volatility, and uncertain economic growth and inflation. The estimated number of new funds launched in 2025 rose to 562 - the highest annual total since 2021 - according to the latest HFR Market Microstructure Report released by HFR.
Hedge fund liquidations also reached historically low levels, with closures totaling an estimated 287 funds - far below the 406 funds that shut down in 2024, which itself was the lowest level since 2004. As previously reported by HFR, total hedge fund industry capital reached another record level to begin 2026, surging to an estimated $5.16 trillion.
Q4 2025 launches led by Equity Hedge and Macro strategies
In Q4 2025, an estimated 135 new funds were launched, led by Equity Hedge (65) and Macro (35) funds - representing a trend shift from the prior quarter when Relative Value Arbitrage led new launches by strategy. On the liquidations side, an estimated 72 funds closed their doors in Q4 2025, led by Equity Hedge (35) and Relative Value (17) funds.
Performance dispersion within the HFRI Fund Weighted Composite Index expanded in 2025: the t...................... To view our full article Click here
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