Global hedge fund launches plunge, liquidations rise amid turmoil
Reuters
Published Sep 30, 2022 03:25PM ET
NEW YORK (Reuters) - New hedge fund launches dove in the second quarter to the lowest level since the 2008 global financial crisis, while fund liquidations spiked, industry data provider HFR said on Friday.
There were 80 hedge fund launches between April and June, down 57% from the first quarter and the lowest number of new funds since the fourth quarter of 2008, when 56 funds were launched, according to HFR
Another 156 hedge funds closed their doors between April and June, 24% more liquidations than the previous quarter. Overall, the number of hedge funds fell to 9,237 in the second quarter from 9,313.
"Risk-off sentiment drove investor risk aversion, with investors maintaining exposures to established funds through the current volatile market paradigm of unprecedented geopolitical and macroeconomic uncertainty," said Kenneth J. Heinz, president of HFR.
The data underscores the challenges faced by the hedge fund industry in 2022 amid market turmoil, with $7.7 billion in net outflows in the first half of the year.
Still, hedge funds on average have outperformed the S&P 500. The HFRI fund-weighted composite index is down 4% this year through August, while the S&P plunged 17% in the same period.
Get The News You Want
Written By: Reuters
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.