- Advertisement -
- Advertisement -

Related

Hedge Fund Launches and Closures Hit Multi-Year Lows

Industry Report

- Advertisement -

Stockholm (HedgeNordic) – New hedge fund launches slipped to an 18-year low last year, but closures hit a multi-year low too. According to data provider Hedge Fund Research (HFR), an estimated 561 hedge funds launched globally last year, whereas 659 funds closed their doors during the year.

Last year’s number of hedge fund debuts was the lowest figure since 2000 when less than 400 funds opened up. Hedge fund closures, meanwhile, peaked in 2008 when close to 1,500 funds shut their doors. The number of closures for 2018 was the lowest annual figure since 2007 when less than 600 funds closed.

An estimated 111 new hedge fund launches were registered in the fourth quarter of last year, whereas the number of liquidations reached 215, the highest quarterly figure since the second quarter of 2017. Funds employing macro-focused strategies accounted for most of the fourth quarter’s new launches. Of the 111 rookies, 50 vehicles use macro strategies. Macro-focused funds also accounted for the highest portion of liquidations in the fourth quarter. Of the 215 closures registered during the quarter, 60 employed macro strategies.

The final quarter of 2018 was the second consecutive three-month period with more closures than openings, with the industry seeing a decrease of 134 in the number of up and running hedge funds in the second half of the year. According to HFR’s president, Kenneth J. Heinz, “a steep drop in investor risk tolerance as financial market volatility surged in Q4 inhibited hedge fund launches into year end, resulted in the lowest quarterly launch total since Q4 2008 and lowest annual launch total since 2000.”

“While investor risk appetite has returned in early 2019, the environment remains challenging for new fund launches, with increasingly institutional capital sources indicating preference for established funds, new launches by established firms or demonstrated performance track record combined with rising investor capital bases,” he adds.

In contrast to the global hedge fund industry, new hedge fund launches in the Nordics outnumbered the high number of closures last year. 15 constituents of the Nordic Hedge Index closed doors or merged into other funds during the course of 2018. Of the 172 current members of the index, 21 were launched in 2018, the highest number of launches on record.

 

Picture © Sergey-Nivens—shutterstock.com

Subscribe to HedgeBrev, HedgeNordic’s weekly newsletter, and never miss the latest news!

Our newsletter is sent once a week, every Friday.

Eugeniu Guzun
Eugeniu Guzun
Eugeniu Guzun serves as a data analyst responsible for maintaining and gatekeeping the Nordic Hedge Index, and as a journalist covering the Nordic hedge fund industry for HedgeNordic. Eugeniu completed his Master’s degree at the Stockholm School of Economics in 2018. Write to Eugeniu Guzun at eugene@hedgenordic.com

Latest Articles

Rising Adoption of Quantitative Investment Strategies Among Nordic Investors

From a high-level perspective, there is a clear trend of increasing adoption of quantitative investment strategies (QIS) among Nordic institutional investors, either through the...

EU Plans Stress Test for Hedge Funds and Non-Bank Firms

European regulators are planning a stress test to identify vulnerabilities beyond the traditional banking sector, focusing on less regulated entities such as hedge funds,...

ALCUR Fonder Continues Hiring Spree

Following two earlier additions this year, ALCUR Fonder continues to expand its portfolio management team at a notable pace. The Stockholm-based hedge fund boutique...

Nordic Private Markets Modernize with Data-Centric Trade Lifecycle Automation

By Anders Stengaard Jensen at Indus Valley Partner: In recent years, asset managers in Nordic countries have accelerated efforts to modernize trade operations, particularly...

Norwegian Hedge Fund Industry Sees Major Boost with New Launch

The Swedish and Danish hedge fund industries remain closely matched in size, with Denmark recently edging ahead of Sweden. While still less than half...

Atlant Funds Hold Up in May Despite Mistimed Market Call

Macroeconomic and market forecasts are notoriously difficult, even for experienced hedge fund managers. What matters more than being right, however, is ensuring that incorrect...

Allocator Interviews

In-Depth: High Yield

Voices

Request for Proposal

- Advertisement -
HedgeNordic
Privacy Overview

This website uses cookies so that we can provide you with the best user experience possible. Cookie information is stored in your browser and performs functions such as recognising you when you return to our website and helping our team to understand which sections of the website you find most interesting and useful.