Hedge Funds Close As Managers Suffer Continued Bad Performance Since 2009
With a disappointing average return of 2%, hedge funds are shutting their door at the highest rate since the 2009 financial crisis.
In the first half of 2014, 461 hedge funds closed. The $37 billion Brevan Howard Asset Management LLP is the latest casualty.
Many of the closures have been among smaller funds and macro funds. Smaller funds have struggled to grow as institutional investors flocked to the biggest players. Macro funds have suffered due to poor performance, earning less than 1 percent average return this year, in an environment of low interest rates and muted swings in prices.
For instance, Josh Berkowitz’s Woodbine Capital Advisors LP shut down after assets dwindled to $400 million from a peak of $3 billion four years ago. Keith Anderson’s Anderson Global Macro LLC and Kingsguard Advisors LP, started by two former Goldman Sachs Group Inc. traders, both closed after less than three years in business.
In addition, other managers struggled to regain after years of losses or underperformance compared to their benchmark. For example, Perella Weinberg Xerion Fund, focused on distressed credit and special situations, shut down after failing to recoup a 21 percent loss dating from 2011. Long-short equity funds, which have underperformed the bull market in stocks, are predicted to have several closures in the near future.
The attorneys of Eccleston Law Offices represent investors and advisers nationwide in securities and employment matters. Our attorneys draw on a combined experience of nearly 50 years in delivering the highest quality legal services.
Related Attorneys: James J. Eccleston