After market turmoil kicked off in the summer, hedge fund liquidations jumped in the second half of 2015, according to new data.

Hedge fund liquidations last year exceeded launches for the first time since 2009 amid redemptions from underperforming funds and falling risk appetite, according to Hedge Fund Research.

During the final quarter, hedge fund liquidations jumped to 305, up from the 257 liquidations in the prior quarter and 203 in the corresponding period of 2014. For the full year, an estimated 979 hedge funds liquidated, the highest level since 2009 when 1,023 funds liquidated.

Hedge fund launches also fell towards the end of the year, from 269 in the third quarter to 183 in the fourth, the lowest quarterly level since 2009. Over the year, launches totalled 968, versus 1,040 in 2014.

Global hedge fund capital rose to $2.9 trillion towards the end of 2015 following an increase of $22.8 billion in the third quarter. However, the industry saw a net outflow of $1.52 billion in the final three months - the first time there has been such a withdrawal since the final quarter of 2011.

“The hedge fund industry experienced a contraction in number of funds in 2015, despite continued growth in investor capital to a record level, as investor risk aversion increased, resulting in capital redemptions from funds which had underperformed through the recent financial market volatility,” said Kenneth Heinz, president of HFR. 

“Investors have become increasingly discriminating in their capital allocations, and the environment for launching a new fund continues to be extremely competitive. As investor tolerance for negative performance deviations falls, and the demand for a competitive fee structures increases, funds which meet these increased institutional investor requirements should attract capital and drive industry performance in 2016.”