New hedge fund launches fall to lowest level since 2008

The hedge fund industry was more enthusiastic about product launches in the first half of the year than the back half so far.

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New hedge fund launches declined in the third-quarter falling to the lowest level since the fourth-quarter of 2008.

It also reversed the first half trend.

Launches totaled an estimated 102 in the third-quarter, bringing the year-to-date total to 391 new funds, according to the latest HFR Market Microstructure Report.

That puts the industry on pace to fall below 500 new launches for 2019. That would be the lowest annual total for new funds since 328 funds launched in 2000.

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The industry highlight has been Europe where new funds not only led the quarter, but extended its 2019 trend.

In the quarter, 76 of the 102 launches were from European-located firms, while for the year, 285 of the 391 launches (73 percent) were from European-located firms.

A bright spot was the sharp decline in fund liquidations.

They were down not only from the previous quarter, but from a year ago as well.

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The third quarter 2019 represents the fifth consecutive quarter in which liquidations exceeded launches.