Hedge fund launches increased in 3Q15 from previous quarter, but declined from last year

Hedge fund launches and liquidations both increased in 3Q15, as energy commodities and equities posted sharp declines, and high yield credit spreads began to widen.

Hedge fund liquidations totaled 257 in 3Q15, up from 200 in the second quarter, and the highest quarterly total since 1Q14, according to the latest HFR Market Microstructure Report, released by HFR®. Total liquidations in the first three quarters of 2015 stand at 674, up from 661 liquidations during the first three quarters of 2014.

The number of hedge fund launches also rose in 3Q15 despite the market turmoil, with 269 new funds launching, an increase over the 252 launches in 2Q15, though the YTD launch total of 785 in the first three quarters of 2015 represents a YOY decline from the 814 launches in the first three quarters of 2014. Launches were led by Equity Hedge strategies with 150 launches, although EH also led liquidations with 113 funds shutting down in the quarter.

Firms with less than $1bn in AuM received inflows of $6.5bn in 2015

Total global hedge fund capital rose in the fourth quarter, as financial market volatility, driven by concerns about slowing Chinese growth and energy market weakness, accelerated into year-end, says the latest HFR Global Hedge Fund Industry Report, released by HFR©.

Hedge fund capital rose to $2.90 trillion in 4Q15, an increase of $22.8 billion over the prior quarter. The performance asset gain offset a small investor net capital outflow of $1.52 billion in 4Q15, the first quarterly net outflow since 4Q11.

Inflows by firm size remained concentrated in the industry's largest firms, with firms managing greater than $5 billion in assets receiving inflows of $3.2 billion in 4Q. Inv......................

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This article was published in Opalesque's New Managers a top-down monthly analysis, news and research publication on the global emerging manager space.