The number of hedge funds launched in the quarter ended June 30 numbered 200, just under the 206 funds started in the previous quarter, new data from Hedge Fund Research showed.
The total of hedge funds that closed in the second quarter also was down — 239 — compared to 291 liquidations in the first quarter.
That's the third quarter in a row that hedge fund liquidations exceeded startups, HFR researchers noted in their HF Market Microstructure report released Thursday. In the first half of the year, a total of 530 funds were shuttered and 406 funds began trading.
If the current pace continues, 2016 would be the slowest year for new hedge funds since 2009 when 784 funds were formed, according to the report.
“The number of launches narrowly declined, though average launch size grew while liquidations fell from the elevated levels of the prior quarter,” said Kenneth J. Heinz, president of HFR, in the report's introduction.
“The current ultra-low interest-rate environment continues to be challenging for new fund launches with intense competition to differentiate strategies, while fees remain a critical focus for investors,” Mr. Heinz added.