Hedge Fund Liquidations and Startups

Hedge Fund Liquidations & Startups

Hedge Fund Startups Continue to Outpace Liquidations

Hedge fund start-ups continued to outpace hedge fund liquidations in the end of 2009.  The strong recovery last year has helped motivate new managers to open funds and prevented the high number of closures in 2008 and the beginning of 2009.  Although some hedge funds are still closing their doors, the industry has been recovering well and is expected to continue to do so through 2010 if the market stays stable.
But hedge-fund liquidations like this are becoming rarer now as a strong market rebound helps the industry recover from a 2008 that was one of its worst years ever.
An estimated 165 hedge funds shut down during the fourth quarter of 2009, according to Chicago-based Hedge Fund Research Inc. That was down from 190 liquidations in the third quarter. In 2008, a record 1,471 funds shut down, HFR noted.
Meanwhile, 230 new hedge funds launched in the fourth quarter of 2009, up from 224 in the third quarter, HFR said. 2008 brought only 659 launches, the firm noted.
"The process of recovery is still ongoing in the hedge fund industry," said Ken Heinz, president of HFR, according to a statement. Source

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