Hedge fund launches were down as of Sept. 30, according to data from Hedge Fund Research. For the year as of Sept. 30, 863 new hedge funds were launched, compared with 1,518 in all of 2006 and 2,073 in 2005. Over the same time period, 408 hedge funds had been liquidated, compared with 717 in calendar year 2006 and 848 in 2005. At the present pace, HFR researchers projected that the combined rate of launches and liquidations in all of 2007 would decline about 25%, the second consecutive year with a decrease.
“One possible issue is the ongoing consolidation of capital in larger funds. In the third quarter of this year, investors allocated nearly 90% of new capital to funds with greater than $1 billion already under management,” HFR President Kenneth J. Heinz said in a news release. “Investor requirements for size and infrastructure may be making it more challenging to open a new fund.”
