Fund launches down; liquidations on the rise

Through the first half of 2016, 406 new hedge funds were launched, while 530 were liquidated. The net decline of 124 funds is the most since 2009, when the industry shrank by 239 funds. The trend is consistent with sentiment among institutional investors as allocations to the asset class have declined amid poor performance and frustration over high fees.

As of June 30, $23.3 billion in assets have been withdrawn from hedge funds, putting 2016 on pace to be the first year since the financial crisis to experience a net negative cash flow.

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