- Advertisement -

Related

HF Launches Rise, Liquidations Fall

- Advertisement -

Stockholm (HedgeNordic) – With no travel and no in-person meetings, the coronavirus pandemic has certainly brought challenges to the capital raising process for new hedge funds. Despite these coronavirus-induced challenges, new hedge fund launches rose in the second quarter from a near-record low in the first quarter, according to Hedge Fund Research (HFR). Hedge fund liquidations in the second quarter declined from the previous quarter, which recorded the highest quarterly number of liquidations in more than four years.

According to HFR’s latest Market Microstructure Report, an estimated 129 new hedge funds were launched in the second quarter, the highest quarterly figure since 153 funds were launched in the same quarter of last year. This compares with an estimated 84 launches in the first quarter, which had been the lowest quarterly figure since the last quarter of 2008. Despite the increase in launches in the second quarter, the total number of estimated launches in the trailing four quarters remains historically low. Only an estimated 404 funds launched over the 12 months through the end of June.

“New fund launches rose through mid-year from historic lows in 1Q as hedge funds posted strong performance through mid-year despite the coronavirus pandemic.”

“New fund launches rose through mid-year from historic lows in 1Q as hedge funds posted strong performance through mid-year despite the coronavirus pandemic as well as ongoing social unrest in the US and the uncertainty of the upcoming US election,” stated Kenneth J. Heinz (pictured), President of HFR. “As investor risk tolerance continues to recover into the second half of the year, institutions are expecting to increase or begin implementing allocations to hedge funds as components of diversified portfolio allocation and in response to the equity and credit market volatility of early 2020.”

“As investor risk tolerance continues to recover into the second half of the year, institutions are expecting to increase or begin implementing allocations to hedge funds as components of diversified portfolio allocation.”

Hedge fund liquidations, meanwhile, declined significantly quarter-over-quarter to an estimated 178 closures in the second quarter from an estimated 304 liquidations in the prior quarter. Fund liquidations remain historically high with an estimated total of 821 liquidations over the trailing four quarters. The second quarter of this year represents the eighth consecutive quarter of hedge fund liquidations outpacing new launches, according to HFR data.

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

Maybe CTA Alpha is Simpler Than You Think: Evidence from the ETF Space

By Andrew Beer, Co-Founder of DBi: Managers of CTA hedge funds and mutual funds often argue that complexity leads to higher alpha generation. After all, why...

Lynx Marches Through March Mayhem

March was defined by a sharp escalation in geopolitical tensions, particularly involving the U.S., Israel, and Iran, creating a highly challenging environment for most investment...

Mixed March for Managed Futures

A sharp escalation in geopolitical tensions set the tone for March, as the US and Israel’s attacks on Iran triggered significant cross-asset volatility. In...

Stop Making Room for Managed Futures

By Corey Hoffstein, Co-Founder, CEO and CIO at Newfound Research: The case for managed futures as a portfolio diversifier is well established. During the...

Othania Positions Trend-Following at the Core of Multi-Asset Portfolios

Not many investors in the Nordics explicitly allocate to trend-following strategies, yet those who do often regard them as an essential building block in...

Muddling Through the Mess: Managed Futures ETFs

By Alexander Mende and Per Ivarsson at RPM Risk & Portfolio Management: Traditionally, Managed Futures (MF) strategies have been limited to hedge funds known...

Allocator Interviews

In-Depth: Diversification

- Advertisement -

Voices

Request for Proposal

- Advertisement -