Hedge fund launches increase, fees decline

Launches of new hedge funds in the final quarter of 2017 exceeded those that were terminated.

About 190 funds launched in the quarter, up from 176 in the previous quarter. There were 166 liquidations, fewer than in previous months.

HFR, which produced the figures, noted the trend was taking place against a buoyant industry background, with hedge fund assets heading towards a record $3.21 trillion (€2.6 trillion) for the beginning of 2018.

Also, the HFRI Fund Weighted Composite Index gained 8.6% in 2017, with no negative months.

Fund liquidations also declined sharply over the full year as industry asset growth accelerated, with 784 funds liquidated, representing a 25% decrease from 2016.

HFR also said average management and incentive fees began 2018 at the lowest level since HFR’s records began ten years previously. The average management fee across all funds was 1.44%, though the average fee for new funds launched in 2017 was lower, at 1.34%.

The average incentive fee across all funds at the start of the year was 17% – a 10 basis-points fall from the previous quarter.

Kenneth J. Heinz, president of HFR, said: “It is likely that investors will continue to increase allocations to hedge funds and alternative investments not only to preserve capital through these transitions but to benefit from the opportunities created.”

Year-to-date at the end of February, the Composite index gained 0.6%, led by equity hedge and technology exposures.

©2018 funds europe

HAVE YOU READ?

THOUGHT LEADERSHIP

The tension between urgency and inaction will continue to influence sustainability discussions in 2024, as reflected in the trends report from S&P Global.
FIND OUT MORE
This white paper outlines key challenges impeding the growth of private markets and explores how technological innovation can provide solutions to unlock access to private market funds for a growing…
DOWNLOAD NOW

LATEST SURVEY

Visit our dedicated Ireland channel for all the latest news and analysis on the country's investment industry.
READ MORE

PRIVATE MARKETS FUND ADMIN REPORT

Private_Markets_Fund_Admin_Report

LATEST PODCAST