Hedge fund closures are getting worse.

Hedge fund closures are hitting Switzerland. The quantitative hedge fund Amplitude Capital AG is returning money after heavy losses over the last couple of years led to substantial withdrawals from the fund. Poor investor interest led to the closure of hedge fund Sator Square Capital Management.

Tough operating conditions drive hedge fund closures

Rising operating costs, difficult capital market conditions and investors’ disillusionment with their high fees structure have led to hedge funds shutting shop.

Data from Eurekahedge and Hedge Fund Research Inc. shows that over the last three years more hedge funds have closed than started.

Entrepreneurs and would-be hedge fund managers are also avoiding the industry. The same data showed that in 2018 the number of hedge fund start-ups were the lowest in 18 years.

What’s interesting is that the downtrend continues even though data from Hedge Fund Research shows hedge funds generated returns of over 7% on average during the first four months of 2019. This was the industry’s best showing since 2006 for that period.

Amplitude Capital & Sator Square

Assets under management at Amplitude fell to $860 million end-March from a level of $1.75 billion not so long ago. However, two years of losses triggered the redemption.

Finally, Sator Square Capital Management, run by Manuel Blanco, decided to close after raising only $20 million. Manuel Blanco is not a newcomer to the industry. He managed money for funds such as Highbridge Capital Management and Balyasny Asset Management.