Death of the Hedge Fund Has Been Greatly Exaggerated
Despite all the big name closures, the overall number of liquidations has fallen this year. There are fewer launches too, but that suggests better quality.
Hedge fund veterans like Philippe Jabre, Leon Cooperman, T. Boone Pickens and Dmitry Balyasny are retreating. This doesn't mean the industry is snookered.
Photographer: Topical Press Agency/Hulton ArchivePhilippe Jabre’s plans to close three funds he personally oversees seems like an ominous omen for the $3 trillion hedge fund industry. Look more closely, and what’s happening is a Darwinian thinning of the herd. But that’s as much to do with fewer launches as it is with liquidations.
As the chart below shows, the number of new hedge funds starting this year is set to be at its lowest in about 18 years — if the trend of the first three quarters is repeated in the fourth.