Market volatility claimed more than 300 hedge funds in the first half, and the difficult conditions also reduced the number of new hedge funds to debut.

More than 180 hedge funds closed their door in the second quarter, bring the total number of hedge fund liquidations in the first six months of the year to 350, a 15% increase year-on-year, according to Hedge Fund Research. Meanwhile, just 240 funds launched in the second quarter, and less than 500 during the half, an attrition rate of 3.46%.

HFR warns that, if current trends continue, about 700 funds—or 7% of all hedge funds—will close this year, the most since 850 funds liquidated in 2005. The attrition rate is on pace to hit 7% this year, up from 5.95% last year.

“The environment of the last 12 months has been characterized by volatility, performance dispersion and asset consolidation toward the largest hedge fund firms,” Kenneth Heinz, HFR president, said. “In the last 12 months, the top decile of funds has outperformed the bottom decile by over 75%, the widest spread on record and a trend which is expected to continue.”

While the hedge fund industry as a whole continues to grow, albeit at its slowest rate in seven years, single-manager funds continued to decline in number, the first time on record that more funds died than were born in two consecutive quarters. Some 147 new single-manager funds debuted in the second quarter, while 157 were liquidated.