Liquidations Rise But Are Outpaced By Launches In '12

Mar 14 2013 | 1:21pm ET

Hedge fund liquidations spiked but hedge fund launches held steady, as the industry grew slightly in 2012 in number of funds.

More hedge funds—873—closed their doors last year than in any year since 2009, according to Hedge Fund Research. And the 283 liquidations in the fourth quarter were the most in a three-month period since the beginning of 2010. But 1,108 new funds debuted last year, just five fewer than in 2011.

More than 300 of the closed hedge funds were equity hedge funds, while the strategies seeing the most new funds born were macro, relative value and equity hedge. All told, industry assets reached a record $2.25 trillion.

"Despite total industry assets increasing to a record level, the capital raising environment continued to be challenging for emerging managers, including both small and mid-sized funds, as well as newly launched funds," HFR President Kenneth Heinz said. "While emerging manager performance has been strong, the bulk of the capital raised in the past two years has been allocated to the industry’s most well-established firms."

HFR also said that fees across the industry continue to fall, with the average management fee now 1.56% and the average performance fee 18.54%. Funds launched last year actually charge a higher average management fee, 1.62%, and a much lower average performance fee, 17.74%.


In Depth

Exotic Assets: Investing In Rare Violins

Jan 17 2017 | 4:43pm ET

By definition, alternative investments include exotic assets far beyond your typical...

Lifestyle

'Tis the Season: Wall Street Holiday Parties Back In Fashion

Dec 22 2016 | 9:23pm ET

Spending on Wall Street holiday parties has largely returned to pre-2008 levels...

Guest Contributor

The Trump Administration: What It Could Mean for Carried Interest

Jan 19 2017 | 5:25pm ET

The arrival of the Trump administration brings the potential for a repeal of the...

 

From the current issue of

Versum Materials (VSM), with a market capitalization of $2.7 billion, enables chipmakers to achieve higher performance at lower cost with enhanced reliability. Versum is a leading global provider of electronic materials for the integrated circuit and flat-panel display markets.