On-going bouts of market volatility coupled with the current turmoil in the banking sector have seen global hedge fund launches slump to the lowest level seen since 2017, according to a report by Reuters, citing information from data services provider Preqin.
On-going bouts of market volatility coupled with the current turmoil in the banking sector have seen global hedge fund launches slump to the lowest level seen since 2017, according to a report by Reuters, citing information from data services provider Preqin.
The report says the latest information from Preqin reveals that, so far this year, just 180 funds have either started trading or plan to do so.
With market turbulence forcing many established macro and trend-following funds to cut positions from bad portfolio bets, untried trend managers in particular have found capital raising difficult, according to the report. Just three managed futures hedge funds employing computer-led strategies to follow market trends have launched so far this year, while just eight firms trading on macroeconomic signals have launched.
Equity strategy funds have proved the most popular with 36 launches, while seven new credit strategy funds have launched and multi-strategy firms trading many different kinds of strategies together had six launches so far in 2023, with one further expected in the third quarter.
With global mergers and acquisitions (M&A) activity shrinking to its lowest level in more than a decade in the first quarter, it’s perhaps no surprise that just six new event driven hedge funds have launched so far this year.
