Hedge funds are shutting at a rate not seen since the financial crisis, as many managers post disappointing returns and an elite group of firms dominate money raising.
Bloomberg News reports that the $37bn Brevan Howard Asset Management is the latest firm to close a fund. Last week it pulled the plug on its $630m commodity fund managed by Stephane Nicolas after it had tumbled 4.3% this year through the end of October, according to a person with knowledge of the firm.
In the first half of the year, 461 funds closed, Hedge Fund Research said. If that pace continues, it will be the worst year for closures since 2009, when there were 1,023 liquidations.
“Most hedge funds have not performed extraordinarily well,” said Stewart Massey, chief investment officer at Massey Quick, which invests in the private partnerships. He expects that redemptions will hit small-and medium-sized firms this year, reducing assets to a level where “they will have to make a decision whether to carry on or not.”
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