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New Managers
September 2016
LAUNCHES:Hedge fund launches, liquidations fell in 2Q as industry post steady gains Hedge fund launches and liquidations fell in the second quarter of this year from the first quarter, according to the latest HFR Market Microstructure Report, released by Hedge Fund Research. New hedge fund launches totaled 200 in 2Q 2016, down slightly from 206 in the prior quarter and 252 in 2Q15. Hedge fund liquidations totaled 239 in 2Q 2016, compared to 291 in the prior quarter and 200 in 2Q 2015. Liquidations exceeded launches for the third consecutive quarter. "The number of launches narrowly declined though average launch size rose, while liquidations fell from elevated levels of the prior two quarters, though remained at a historically high level in 2Q as hedge funds produced steady gains through mid-year," said Kenneth Heinz, president of HFR. Liquidations exceed launches in H1 HFR said the number of fund liquidations in the first half of 2016 totaled 530, exceeding the 406 new fund launches. Fund liquidations during the period is also the second-largest total since HFR began tracking this data in 1996, and launches represented the lowest total since 2009, when 784 funds were started. As previously reported by HFR, total hedge fund industry capital as of mid-year was $2.898tln, approximately 2.4% below the record $2.969tln from 2Q15. Average industry-wide fees were unchanged from the prior quarter, although new fund launches reflected declining fees. The overall average hedge fund management fee remained at 1.50% as of 2Q, while the average incentive fee stood at 17.6%. However, the average management fee of new launches fell to 1.45%, down from 1.48% the prior quarter, while the average incentive fee of new launches declined to 17.89%, representing a 61 bps decline from 1Q16. Heinz added, "The current ultra-low interest rate environment continues to be challenging for new fund launches, with intense competition to d...................... To view our full article please login
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