The pace of hedge fund failures is picking up after another year of relatively weak returns.
Some 461 funds shut in the first half of the year, according to industry research firm HFR. If that pace continues, nearly 1,000 hedge funds will close in 2014. That would be the most since 2009, when 1,023 funds liquidated. The record was 1,471 in 2008 during the financial crisis, according to HFR.
"It's not unexpected that you see some of the weaker hands ... that really can't generate sustainable performance over periods of time looking at this environment and just deciding it's not worth the cost of operating," said Andrew Lee, head of alternative investment strategy at UBS Wealth Management.
Lee said that the investment environment was challenging overall for hedge funds, leading to poor performance at some shops, and that fundraising was also difficult for smaller and less established money managers, likely the source of many of the liquidations in 2014.