Global hedge fund launches at lowest level since 2017 -Preqin

By Nell Mackenzie

LONDON (Reuters) – Hedge fund launches in 2023 are at their lowest level globally since 2017, data provider Preqin said, against a backdrop of banking upheaval and bouts of market volatility.

So far this year, 180 funds have started or plan to start trading, Preqin told Reuters on Tuesday.

Untried trend managers in particular have found capital raising tough given market turbulence which has forced many established macro and trend-following funds to cut positions from bad portfolio bets.

Managed futures hedge funds using computer-led strategies to follow market trends and firms trading on macroeconomic signals have had three and eight launches respectively this year.

There have been 36 launches of equity strategy funds, making them the most popular strategy, Preqin data showed.

Meanwhile, credit has seen seven new funds launched and multi-strategy firms trading many different kinds of strategies together had six launches so far in 2023, with one further expected in the third quarter.

Global mergers and acquisitions (M&A) activity shrank to its lowest level in more than a decade in the first quarter, and only six new event driven hedge funds have started this year.

“The strong public equity performance this quarter was encouraging for a strategy that correlates highly with public markets. Meanwhile, macro strategies fell out of favor just as quickly as they had come in,” Preqin said in its Hedge Funds Q1 2023 report, which was released earlier this month.