Poof! $35 billion gone from hedge funds

Thu Mar 1, 2007

At least 83 funds closed shop in 2006, with energy portfolios highlighted by Amaranth leading the way

In a year that experienced the largest-ever hedge fund meltdown, at least 83 hedge funds closed their doors in 2006, erasing about $35 billion in assets from the hedge fund world. The largest shutdown, of course, was the spectacular collapse of $9.1 billion Amaranth Advisors. Amaranth's record failure boiled down to losing bets on highly leveraged natural gas positions, but only two other significant liquidations came from the energy sector. With 27 shutdowns, U.S. equity logged the highest number of closings, which is not surprising given that the sector is such a big one. Fixed income and high yield also had a high casualty rate, with seven funds shuttered. And the biotech sector stood out with six liquidations.

The largest implosions of 2006 - 9 funds with peak assets of at...

ISSN: 2151-1845 / CDC10004H

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