Hedge fund disappeared 15%
Hedge-fund liquidations rose to an all-time high last year, with about 15 percent of the industry’s offerings disappearing as managers posted record losses, according to Hedge Fund Research Inc.
About 1,471 funds shut down, the closures exceeded by 70 percent the previous record of 848 set in 2005. In the fourth quarter, about 778 funds closed as investors withdrew $150 billion. Those funds that will be around this year are the ones with the right skill set.
Hedge funds lost an average 19 percent last year, the industry’s worst returns since Hedge Fund Research started tracking data in 1990. Client assets fell by 37 percent from the peak in June to $1.2 trillion amid the biggest losses in equity markets since the Great Depression, according to Morgan Stanley.
Among the firms shutting funds were Drake Management LLC, a firm started by former executives from BlackRock Inc.; Peloton Partners LLP, the London-based firm run by former Goldman Sachs Group Inc. partners; and Ospraie Management LLC, run by Dwight Anderson in New York.
The closings represented about 15 percent of 9,284 funds in the industry. The total included more than 275 funds of hedge funds, which allocate money to managers on behalf of clients, shut down.
On the other hand, there were only about 659 openings last year, the lowest since 2000, when 328 funds were set up, the research company said. Fifty-six funds were started in the fourth quarter, compared with 117 in the previous quarter.
About 1,471 funds shut down, the closures exceeded by 70 percent the previous record of 848 set in 2005. In the fourth quarter, about 778 funds closed as investors withdrew $150 billion. Those funds that will be around this year are the ones with the right skill set.
Hedge funds lost an average 19 percent last year, the industry’s worst returns since Hedge Fund Research started tracking data in 1990. Client assets fell by 37 percent from the peak in June to $1.2 trillion amid the biggest losses in equity markets since the Great Depression, according to Morgan Stanley.
Among the firms shutting funds were Drake Management LLC, a firm started by former executives from BlackRock Inc.; Peloton Partners LLP, the London-based firm run by former Goldman Sachs Group Inc. partners; and Ospraie Management LLC, run by Dwight Anderson in New York.
The closings represented about 15 percent of 9,284 funds in the industry. The total included more than 275 funds of hedge funds, which allocate money to managers on behalf of clients, shut down.
On the other hand, there were only about 659 openings last year, the lowest since 2000, when 328 funds were set up, the research company said. Fifty-six funds were started in the fourth quarter, compared with 117 in the previous quarter.
Labels: crisis, hedge fund
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