Market Overview

2019 A Year To Forget For Hedge Funds

2019 A Year To Forget For Hedge Funds

It was a difficult year for the hedge fund sector, as the industry is poised to end the year with more closures than launches for the fifth straight year, according to Bloomberg.

Ackman A Winner In 2019

Total assets under control by hedge funds appear to have hit a plateau of near $3 trillion a few years ago, which implies the industry "isn't going away" but is "definitely not growing," Bloomberg's Katherine Burton reported.

Some of the stock funds managed to perform well in 2019, such as Bill Ackman's Pershing Square, which is poised to end the year with a 50% gain, Burton said.

On the other hand, Ray Dalio's Bridgewater fund performed "very poorly" in 2019 and is on track for its first losing year in some time, she said. 

Hedge Fund Managers Growing Older 

Part of the problem facing the hedge fund industry is the fact that many managers are in the 50s or 60s and finding it more difficult to make money, Burton said.

Fortunately for them, they are mostly already very rich and can decide to close shop and retire, she said. 

The "biggest bright spot" for the industry and a potential area of growth in 2020 could come from veterans of hedge fund giant Citadel, she said.

After gaining experience at Citadel, Burton said new fund managers are managing to raise $1 billion or more from investors.

Related Links:

Marcato Capital Closing Down As Assets Shrink Over Past Two Years

The Death Of Hedge Funds At A Time We Will Need Them

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