West Palm Beach (HedgeCo.net) – Chicago-based information company Hedge Fund Research (HFR), said the number of hedge funds liquidated in the third quarter rose to 344, which is more than three times the 105 liquidations in the third quarter of 2007. It’s also 77 more than the previous record of 267 liquidations in the fourth quarter of 2006.
CNN reported today that 693 hedge funds are known to have closed so far this year, 344 of those in the third quarter alone. Their estimate based on the present pace is that a total of 900+ hedge funds will have shut their doors when the year is through and the total tally becomes available.
"The hedge fund industry is currently experiencing a structural consolidation that mirrors broader trends across the entire financial industry," HFR President Kenneth Heinz said in a statement. Stock market volatility and a lack of available credit "increased the challenges for both funds and investors," he added.
In the third quarter, the number of hedge funds closing shop exceeded the number of funds launched for the first time since HFR started tracking this data in 1996.
Hedge fund liquidations are on track to reach 920 for the full year, the report said. That would outpace the 563 liquidations last year, and could top the previous record of 848 in 2005.
Alex Akesson
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