Thursday, 23 October 2014
Last updated 1 min ago
Feb 1 2007 | 12:03pm ET
Misery loves company, and Amaranth Advisors had plenty of that in 2006, as some 450 hedge funds closed their doors.
Of course, none were as spectacular as the blow up of Greenwich, Conn.-based Amaranth, which lost some $5 billion on natural gas trades gone bad. But, according to the Hennessee Group, which compiled the data, many shuttered more quietly for the same reason: poor performance. Others fled the growing hedge fund industry due to fewer trading opportunities or for greener pastures in new careers.
The news, however, was far from all bad. While 450 hedge funds said goodbye, last year saw the birth of between 1,000 and 1,500 funds. What’s more, the overall attrition rate declined, with just 5.1% of funds tracked by Hennessee closing, compared to 5.4% in 2005, 6.2% in 2004 and 6.4% in 2000. Over the past eight years, an average of 5.2% of hedge funds have thrown in the towel annually.
Hennessee went on to predict that failures and liquidations should continue to decline in the future.
Sep 22 2014 | 4:15pm ET
"I tell people that everybody likes good news and so if you have good performance that’s wonderful,” explains Mike McKitish of Peddie School's endowment, “but it’s the people that want to talk about the bad news or where they drifted and how they came back and how they stayed to their discipline…” that he wants to hear from. Read more…
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