Hedge Fund Trends: Launches Outpace Liquidations, Incentive Fees Decline

March 12th, 2010
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For the first time since the financial crisis began, hedge fund launches exceeded hedge fund liquidations during the fourth quarter of 2009, according to research conducted by Hedge Fund Research, Inc. Although hedge fund liquidations outpaced launches in the aggregate for both 2008 and 2009, the fourth quarter of 2009 saw a reversal in this trend as 230 funds were launched while 165 were liquidated.

The report also found that hedge fund incentive fees have declined, presumably to entice new investors and to keep current investors happy. Over the course of the financial crisis, the average incentive fees fell for both single manager funds (.12% decline) as well as funds of hedge funds (1.15% decline). New hedge fund launches in 2009 also suffered from the depressed financial climate as their average incentive fees were 1.6% lower than the industry average.
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Related Article Tags: Multi-Strategy, Long Short, Equity, Debt and Global Macro Hedge Fund News; Hedge Fund Launches and Hedge Fund Closings

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