Quarterly hedge fund launches exceeded closures for the first time in more than two years, according to new data from Hedge Fund Research released Thursday.
In the three months ended Sept. 30, 176 new hedge funds began trading compared to 137 fund liquidations. In the previous quarter, 180 hedge funds were launched and 222 funds closed.
The number of new funds launched in the third quarter of 2016 totaled 170, while liquidations totaled 252.
Year-to-date Sept. 30, a total of 545 hedge funds were launched vs. 618 liquidations. In all of 2016, 729 funds were started and 1,057 closed.
"2017 has been a recovery year for the hedge fund industry from 2016, with improved performance, exciting strategy expansion and lower costs driving new fund launches and industry capital to a new record," said Kenneth J. Heinz, HFR's president, in a news release accompanying the release of data.
Mr. Heinz said he expects the trend in new hedge fund launches to continue with "the added tailwind of growth not only from risk-parity and risk-premia strategies, but also from funds focused on Asian and emerging markets, technology, health care, activist (and) managers specializing in blockchain and cryptocurrency investing. This powerful industry evolution and trajectory is very likely to continue" in the first half of 2018.