Hedge Fund Liquidations Q1
Fund Liquidations Up in Q1 2010 Despite Performance Gains
Typically, liquidations of hedge funds track performance. In 2008, a record 1,471 funds shut down as that index fell a sharp 19.03%.
HFR President Ken Heinz said heightened risk awareness among investors has made survival more difficult for small funds.
"There is asset growth in the first quarter, but it all went to the larger firms as investors are still very sensitive to risk, especially the structural risk in the firms," he said. HFR said there was $13.76 billion of net asset flow to funds in the first quarter.
Nottingham Investment Administration, a service provider to hedge funds, said some funds might have opted for a fresh start after the financial crisis.
"Some funds hung on through 2008 and 2009," said Kip Meadows, Nottingham's chief executive. "But when they see that their funds are not going to work or they can't have a good three-year track record, some just folded and [will] start all over again." Source