Hedge fund closures hit 2-year high in 1st quarter

Date: Monday, June 18, 2012
Author: Reuters

Hedge fund closures rose to a two-year high in the first quarter of 2012, data released Friday showed.

According to tracking firm Hedge Fund Research of Chicago, 232 funds liquidated in the first three months of the year. That marked the highest quarterly liquidation of hedge funds since 240 shuttered in first quarter 2010.

However, those closures were offset by an increase in new hedge funds, as total hedge fund industry assets hit a record $2.13 trillion.

There were 304 new funds launched in the first quarter, the highest quarterly total since the final three months of 2007.

Meanwhile, there were more liquidations of Fund of Hedge Funds than launches in the first quarter, with 64 firms closing their doors. There were 34 new Fund of Hedge Fund firms launched during that time. Last quarter marked the fourth consecutive quarter of decline in number of those types of hedge fund firms, the tracker said.

The benchmark HFRI Fund Weighted Composite Index gained 2.54 percent for the year through May 31, after losing 1.59 percent last month which marked its third consecutive month of losses.