Launches of new hedge funds in the second quarter rose from a near-record low the previous quarter, after investors embraced more risk following a volatile quarter resulting from the COVID-19 pandemic.
New launches totaled an estimated 129 in the three months ended June 30, said Hedge Fund Research in an update. It is up from an estimated 84 launches in the first quarter, which had been the lowest quarterly estimate since the fourth quarter of 2008, when 56 hedge funds were launched.
Liquidations of hedge funds in the second quarter sharply declined to an estimated 178 from an estimated 304 liquidations in the prior quarter. Driven primarily by pandemic-related volatility, the trailing four quarters still show a historically high number of liquidations, with an estimated total of 821.
The second-quarter launch and liquidation estimates represent the eighth consecutive quarter in which liquidations outpaced launches, according to HFR data.