The number of new hedge fund launches is expected to fall to its lowest level in 24 years this year, with data from the first three quarters of the year revealing that only 123 funds were launched globally buy the end of September, according to a report by Reuters,
The report cites data from alternative assets data specialist Preqin as highlighting that that figure sth lowest since at least 2000 when total launches for the whole year reached 191. Hedge fund launches peaked in 2017, with 697 new funds debuting during the year.
Preqin attributes the decline in new launches to challenging fundraising conditions in key markets such as the US and Europe, as well as tighter regulatory scrutiny in China. A survey conducted by the firm in November found that 40% of hedge fund managers reported that fundraising had become more difficult in 2024 compared to the previous year. An additional 40% noted that conditions remained as tough as in 2023.
Despite the decline in new fund launches, niche strategies—such as funds trading insurance-linked securities and cryptocurrencies—have grown in popularity. The number of such funds has more than doubled in the past five years, rising from 730 in 2019 to 1,570 in 2024.
