The pace of hedge fund liquidations is sharply dropping, with only 3%, or 292 funds, shutting its doors in the second quarter, according to Hedge Fund Research. By comparison, 22%, or 376 funds, liquidated in the first quarter. Throughout 2008, 1,471 funds, or 19% of the hedge fund universe, shut down.
Meanwhile, the number of hedge fund launches is on the rise, with 182 new offerings in the second quarter, up from 148 in the first quarter. Nonetheless, hedge fund fees are edging down, averaging 19.18% in the second quarter, compared to 19.34% in the first quarter.
“As hedge fund industry consolidation continues, multiple data suggests the impact of a tumultuous 2008 remains both widespread and sustained,” Hedge Fund Research Kenneth Heinz told The Wall Street Journal. “Performance gains for 2009 have been the strongest since 1999, but investors are making demands for greater transparency and structural improvement, setting the state for the next period of industry expansion.”