More hedge funds have closed in the last decade than were open for business at the start of it, according to industry numbers from HFR.
A total of 9,000 hedge funds and fund of funds have liquidated since the start of 2005, almost as many as HFR estimates exist now: 10,150. At the end of 2004 there were around 7,500 funds offering to manage cash.
The figures are a reminder of the transient nature of such high fee investment vehicles, which on average survive for only five years. The rapid turnover adds to questions about how such vehicles can be suitable stewards of capital for large long term investors such as pension funds. Read more
First-half performance numbers for the hedge fund industry as collated by HFR have arrived. Three up months and three down months leave the industry delivering after-fee gains to investors of 3.2 per cent, on average.
This first half performance is in line with 1H13 gain of +3.2 per cent, though hedge funds posted gains in only three of six months in 2014 in contrast to gains in five months in 1H13. The HFRI Fund of Funds Composite Index was up +0.9 per cent in June, concluding 1H14 with a gain of +2.0 percent but trailing the gain of +3.4 percent for the same period in 2013.
First quarter performance results for surviving hedge funds are out. A volatile performance, says index compiler HFR.
For the first quarter, the HFRI [Fund Weighted Composite] gained +1.1 percent, with a strong February gain offsetting declines in both January and March.
February was a good month for the hedge funds, erasing January losses and then some, according to HFR.
The average hedge fund was up 2.1 per cent in February, to leave it up 1.5 per cent for 2014 so far. Read more
We have mentioned the five-year problem before. However, we suspect that the ranks of the zombies will be swelling again soon, because of the simple fact that the five-year track record of stock-trading hedge funds is horrible.
The generally excellent Spencer Jakab leaves his zombie repellent behind on Monday, when he speculates in the Wall Street Journal that the formerly decent returns of the hedge fund industry will return once central banks begin to retreat from markets.
The problem is mean reversion. It may be one of the most powerful forces in the investment universe but, as we have said before, it doesn’t apply when you try to compare the zombies of the 1990s and early 2000s to the lumbering, fee eating, industry as it exists today. Read more
Two months to go to year-end, and hedge fund managers are starting to ask their staff for some ideas to get performance up before January rolls around. So how are the still-living ranks of the zombie industry doing?
Broad-based gains for October, says industry data provider HFR: Read more
Hedge fund managers are under pressure to deliver strong performances in the last four months of the year after yet another month of mixed results, reports the FT. While August was, on average, positive for the industry, some big managers struggled to gain traction with many now contemplating ramping up the level of risk in their portfolios, say brokers. The average hedge fund returned 0.17 per% in August and was up 1.29% for the year through to end-July, according to Hedge Fund Research. Among big funds, only a handful have shone, including Autonomy Capital and funds run by Man Group and Winton.
Hedge funds focused on energy markets have been hit by volatile commodity prices and the Gulf of Mexico oil spill disaster, leaving many funds with double-digit percentage losses in the 2010 first-half, reports the FT. The average energy commodity fund lost 2% since the start of the year to the end of May, compared with gains of 1.3% for the hedge fund industry as a whole, according to Hedge Fund Research. In addition, the performance of some energy hedge funds has been particularly poor in the last two months, say investors.
Hedge fund liquidations fell by 50% in the first quarter from the record levels set in the previous quarter as the industry grew for the first time in 10 months, according to data provider Hedge Fund Research and Eurekahedge. In the first quarter, 376 funds closed compared to 778 fund closings in the 2008 final quarter, said HFR. Separate figures from Eurekahedge said hedge funds saw net cash inflows in May for the first time in 10 months of $11.3bn, along with $19bn from performance, for total growth of $30.3bn.