New multi-strategy hedge fund launches took a big tumble in the first three months of the year, accounting for less than 10% of all new funds and down from about 25% in the last quarter of 2023, according to a report by Reuters.
The report cites figures from data provider Preqin in revealing that launches of multi-strategy funds have fallen to their lowest in around a year since it started collecting the data.
Large multi-strategy managers have been in demand with investors in recent years, although according to research by the prime brokerage division at Barclays, only seven multi-strat firms manage assets in excess of $10m. Of the 47 multi-manager funds the bank tracks, 32 oversee less than $5bn of assets.
New funds have also trailed the performance of established managers over the past three years, with annualised returns of about 7.9%, around 1% lower than existing firms with more than $5bn in assets, according to Barclays.
In general, multi-strategy funds, which have outperformed the wider hedge fund sector by an average 1% over the past three years, have had a tough start to 2024, posting an average 3.1% gain for the first three months of the year compared with a 4.4% industry average.
