The fact that a record number of hedge funds were both launched and liquidated in 2005 signifies that the industry is still afloat and increasingly competitive, said Hedge Fund Research, according to

Last year, 2,073 funds were launched and 848 of them were liquidated, up from 1,435 launches in 2004 with 296 closures.

"The data shows that this remains an enormously active marketplace, with new funds entering and exiting at a higher rate than ever before," said Josh Rosenberg, president of HFR, in a statement. "But it is also an unforgiving environment, as the current record level of attrition [11.4% for 2005] shows."

Subscribe Now

Access to premium content including in-depth coverage of mutual funds, hedge funds, 401(K)s, 529 plans, and more.

3-Week Free Trial

Insight and analysis into the management, marketing, operations and technology of the asset management industry.