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Matthias Knab, Opalesque for New Managers: Both new hedge fund launches and liquidations rose sharply to begin 2026, with liquidations climbing off near-historic lows to the highest quarterly total in two years, according to the latest HFR Market Microstructure Report.
An estimated 166 new funds launched in 1Q26, an increase of 30 over the prior quarter and 45 over 1Q25. The increase follows a FY 2025 launch total of 561 funds, the highest annual total since 2021. At the same time, liquidations jumped from historically low levels to 129 in 1Q26, up 45 over the prior quarter and the highest quarterly total since 2Q24. For FY 2025, an estimated 287 funds closed - far below the 406 closures in 2024, which had marked the lowest level since 2004.
As previously reported by HFR, total hedge fund industry capital surged to another record of an estimated $5.22 trillion through 1Q 2026.
Investors positioned around the performance drivers that have defined recent quarters: ongoing geopolitical risk, AI and cryptocurrency volatility, and uncertain economic growth and inflation. Kenneth J. Heinz, President of HFR, noted that rising launch activity through early 2026 reflected strong institutional and retail demand despite accelerating geopolitical risk, with equity gains concentrated in AI and technology sectors - indicating, in his words, "both increased risk and opportunity for mana...................... To view our full article Click here
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