Hedge fund shut downs declined in 2010 despite scandals

By Anastasia Donde

Wed Mar 2, 2011


Hedge fund shut downs fell sharply in 2010, but some firms will face challenges in 2011.


By Anastasia Donde

The good news: Far fewer hedge funds shuttered in 2010 compared with the previous year. Approximately 111 hedge funds closed last year, down 41% from 2009, when 187 funds shut down. Assets among the largest U.S. funds are growing and the number of new fund launches is rising, all of which seem to indicate that the hedge fund industry is poised to bounce back strongly in 2011.

The bad news? Some of the highest-profile shutdowns of 2010, such as Loch Capital Management and FrontPoint Partners’ health care funds, were tied to the insider trading scandal, which is still going strong and has already claimed more funds this year—including firms that were never charged with wrongdoing. Others shut down because of redemptions, poor performance or the inability to gain traction with investors, issues that continue to plague funds in 2011. Goldman Sachs’s Global Equity Opportunities Fund never...

ISSN: 2151-1845 / CDC10004H

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