For the second straight year, more hedge funds closed than were launched in 2009, according to data released today by Hedge Fund Research.
Last year, 1,023 hedge funds closed, compared to 784 that started. In 2008, 1,471 funds closed while 659 were launched, according to HFR’s March hedge fund report, which provided analysis of the hedge fund researcher’s year-end 2009 data.
HFR’s analysis also showed that the average single manager’s hedge fund performance fee fell to 19.2% as of Dec. 31, compared to 19.31% as of March 31, 2008, before the financial crisis started. The average hedge fund-of-funds manager’s performance fee fell to 6.9% as of year-end 2009, compared to 8.05% in the first quarter 2008. Further, HFR reported that the average incentive fee for hedge funds started in 2009 was 17.6%, 1.6 percentage points below the average.
“A number of firms were able to achieve outstanding results in 2009 amidst a very complex economic environment, but the landscape in terms of capital, strategies, service providers, fees, regulation, liquidity and transparency, has evolved significantly. These trends are likely to define the growth of the hedge fund industry in the next decade,” said Kenneth J. Heinz, HFR’s president, in the preface to HFR’s report.