- Advertisement -
- Advertisement -

Related

Hedge Fund Launches Fall Again

Industry Report

- Advertisement -

Stockholm (HedgeNordic) – The coronavirus crisis has made life increasingly more difficult for managers seeking to launch hedge funds. “The second quarter of 2020 proved a challenging time to launch new hedge funds,” writes Preqin. Only 59 new hedge funds were launched in the second quarter, down from 182 in the first quarter of the year and 228 in the second quarter of last year.

“In this uncertain economic climate, managers look to be diversifying their investment focus,” Preqin writes in its quarterly update on the hedge fund industry for the second quarter. Over two-thirds of all hedge funds launched in the second quarter were global-focused vehicles, one of the largest proportions over the past four quarters. Funds focused on North America accounted for 14 percent of all launches, down from 22 percent in the first quarter of the year. The proportion of Asia-Pacific-focused fund launches increased from five percent in the first quarter to 14 percent in the second quarter.

Hedge Fund Launches by Geographic Focus, Q3 2019 – Q2 2020. Source: Preqin Pro.

The challenges stemming from the coronavirus pandemic have also affected the universe of strategies employed by new launches. The proportion of new funds employing equity strategies decreased over the first two quarters of 2020, accounting for just 28 percent of all launches in the second quarter, down from 32 percent in the first quarter and 48 percent in the last quarter of 2019.

Hedge Fund Launches by Top-Level Strategy, Q3 2019 – Q2 2020. Source: Preqin Pro.

In contrast, the proportion of launches that focus on opportunities arising from distressed and recapitalizations has increased “as more companies face difficulties.” In the second quarter, new launches employing event-driven strategies accounted for 15 percent of all new launches, up from five percent in the previous quarter. The share of launches using credit strategies, meanwhile, increased from 13 percent of all launches in the first quarter to 18 percent in the second quarter.

More cryptocurrency-focused funds are entering the global hedge fund industry, according to Preqin. “While the overall number of launches declined significantly, the steady stream of cryptocurrency funds entering the market drove up niche strategies to 13 percent of all funds launched in Q2 2020,” writes Preqin.

Photo by Mark Williams on Unsplash

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.