(Bloomberg) -- Global hedge fund liquidations exceeded launches for the third consecutive quarter as managers faced a tough capital-raising environment.
About 213 funds closed in the first three months of this year, compared with 136 that opened, according to a Hedge Fund Research Inc. report Friday. Liquidations remained steady from the prior quarter, while launches rose about 23%.
Hedge fund startups are under pressure amid lackluster performance and investor discontent over high fees. Investors pulled $17.8 billion from hedge funds in the first three months of this year, the fourth consecutive quarterly outflow. The industry has seen a string of firms shut funds or return investor capital including Highbridge Capital Management and Duane Park Capital Management.
Read more: What's It Take for a New Hedge Fund to Make It? $250 Million
The average management fee for funds launched in the first quarter declined 10 basis points to 1.19%, while the average incentive fee was 18.79% -- an increase from 17.9% for funds started in 2018.
Hedge funds, on average, rose 3% in the first quarter on an asset-weighted basis, according to HFR, lagging the S&P 500 Index, which gained 13.7%, with dividends reinvested, in that period.
--With assistance from Katia Porzecanski.
To contact the reporter on this story: Sammy Criscitello in Boston at scriscitello@bloomberg.net
To contact the editors responsible for this story: Alan Mirabella at amirabella@bloomberg.net, Melissa Karsh, Josh Friedman
©2019 Bloomberg L.P.
Essential Business Intelligence, Continuous LIVE TV, Sharp Market Insights, Practical Personal Finance Advice and Latest Stories — On NDTV Profit.
