--- title: Hedge Fund Launches at Lowest Level in 25 Years description: Hedge fund launches hit a 25-year low in 2024. Explore the reasons behind this trend and what the future holds for hedge funds and private equity. image: https://blog.stpis.com/hubfs/Pictures.png --- [![STP\_header\_logo](https://blog.stpis.com/hs-fs/hubfs/STP%20Growth%20Child/STP_header_logo.png?width=75&height=94&name=STP_header_logo.png "STP_header_logo")](http://stpis.com) - [FAQs](https://stpis.com/faqs-fund-administration-compliance-managed-services/) - [About](https://stpis.com/about/) - [About STP](https://stpis.com/about/) - [History](https://stpis.com/history/) - [Team](https://stpis.com/people/) - [STP Careers](https://stpis.com/careers/) - [STP Culture](https://stpis.com/careers/culture/) - [Benefits](https://stpis.com/careers/benefits/) - [Diversite, Equity, Inclusion & Belonging (DEIB)](https://stpis.com/careers/deib/) - [Hiring Process](https://stpis.com/careers/hiring-process/) [Portal Login](https://portal.stpis.com/) [Connect With Us](https://stpis.com/connect-with-us/) - [Who We Serve](https://stpis.com/who-we-serve/) - [Institutional Managers Investment operations services and innovative software for the front, middle, and back office.](https://stpis.com/who-we-serve/institutional-managers/) - [Wealth Managers Custom and turnkey asset management programs to grow assets and support clients.](https://stpis.com/who-we-serve/wealth-managers/) - [Emerging Managers Best-in-class full service solution to springboard your startup to the next level.](https://stpis.com/who-we-serve/emerging-managers/) - [Private Fund Advisors Comprehensive suite of fund administration, compliance, account and investor reporting services](https://stpis.com/who-we-serve/private-fund-advisors/) - [What We Do](https://stpis.com/services/) - [Investment Operations Outsourcing End-to-end investment operations and trading services.](https://stpis.com/services/investment-operations-outsourcing/) - [Fund Services Complete suite of services that deliver best-in-class fund administration.](https://stpis.com/services/fund-administration-services/) - [Compliance Services Get oversight that keeps you compliant and ready for changing regulatory requirements.](https://stpis.com/services/compliance/) - [Managed Services Designed to reduce operational burden, streamline workflows, and help you scale without adding headcount.](https://stpis.com/services/managed-services/) - [Trade Settlements Streamline processes, increase efficiency, and mitigate risk with post-trade settlement services.](https://stpis.com/services/trade-settlements/) - [Reconciliation Services Automate reconciliation tasks and strengthen oversight with reconciliation dashboards.](https://stpis.com/services/reconciliation/) - [BluePrint](https://stpis.com/blueprint/) - [Why STP](https://stpis.com/why-stp/) - [STP Knowledge Hub](https://stpis.com/stp-knowledge-hub/) - [Perspectives Fresh, original STP content written by members of our team, covering a broad range of topics.](https://blog.stpis.com/blog) - [STP in the News Our take on industry articles and topics written by our colleagues across the financial services space.](https://stpis.com/stp-knowledge-hub/in-the-news/) - [Case Studies Explore real-world success stories that highlight how we've helped clients overcome challenges, drive growth, and achieve their goals.](https://stpis.com/stp-knowledge-hub/case-studies/) - [Strategic Insights Stay ahead of regulatory changes, operational challenges, and industry shifts. Download our strategic insights to equip your firm with expert guidance on compliance, operations, and growth strategies.](https://stpis.com/stp-knowledge-hub/strategic-insights/) Jan 2025 # Hedge Fund Launches at Lowest Level in 25 Years ![Picture of STP Perspectives](https://blog.stpis.com/hs-fs/hubfs/STP_Logo_Color_Tag-2.png?width=50&name=STP_Logo_Color_Tag-2.png) [STP Perspectives](https://blog.stpis.com/blog/author/stp-perspectives) Share: [facebook-f icon](http://www.facebook.com/share.php?u=https://blog.stpis.com/blog/hedge-fund-launches-at-lowest-level-in-25-years) [linkedin-in icon](http://www.linkedin.com/shareArticle?mini=true&url=https://blog.stpis.com/blog/hedge-fund-launches-at-lowest-level-in-25-years) [Twitter icon](https://twitter.com/intent/tweet?url=https://blog.stpis.com/blog/hedge-fund-launches-at-lowest-level-in-25-years) [pinterest-p icon](http://pinterest.com/pin/create/link/?url=https://blog.stpis.com/blog/hedge-fund-launches-at-lowest-level-in-25-years) [envelope icon](mailto:?body=https://blog.stpis.com/blog/hedge-fund-launches-at-lowest-level-in-25-years) Hedge Fund Launches at Lowest Level in 25 Years 2:36   It has been widely reported over the last few weeks that Hedge Fund launches in 2024 were at their lowest level in 25 years and there are multiple theories as to why.  Naturally, I have my own perspective. As of the second quarter of 2024 there were over 30,000 hedge funds operating worldwide with approximately 70% of them being managed by US based fund managers.  Is the drop in new launches a simple economic principle of supply and demand? From a supply perspective, whether it is a High Net Worth individual or an Institutional Investor looking to make an investment, the hedge fund profile they are looking to allocate to likely already exists.  The Hedge Fund community has always found new and interesting ways to invest, whether it be a new strategy, or some type of “new” security, the ideas have flowed for years.  Perhaps we have started to run out of ideas. With the above being said, new funds are still going to come from emerging managers who are breaking away from an existing role at a large fund to do it on their own.  Will their ideas be new?  Possibly not, however, they may be able to do it better than someone else already in the market. With the Nasdaq Composite rising over 30%, the S&P 500 over 24% and the Dow Jones up 13% in 2024 it raises the question as to why pay a 2% Management Fee and 20% Performance Fee when one can get returns in the 13 -30% range by simply putting money into a diversified stock portfolio?  Has this diminished the demand for new funds?   As we all know, these rises in the market cannot last forever.  In my opinion, one medium term correction in the stock market and we are going to see a big uptick in new launches.  Once again, as the cycle has been for many years, there will be a return to both new funds that should be able to outperform the market and, of potentially more importance, new funds that can provide capital preservation.   Having worked with alternatives for nearly 30 years now, I have seen cycles from the highest of highs with hedge funds to the lowest of lows.  Right now we are riding a wave of new private equity managers, which I believe to be part of this cycle.  Is it possible that next year’s headline will be “New Private Equity Funds at Lowest Level in 25 Years”?  I hope not, but I would also think the accompanying headline would read “New Hedge Funds Clock Significant Bounce Back in 2025”.   Only the cycle will tell.   [![fund admin cta](https://no-cache.hubspot.com/cta/default/20095280/interactive-172834896387.png)](https://blog.stpis.com/hs/cta/wi/redirect?encryptedPayload=AVxigLKZyNh2ntevHT9yO6cVBYYRvMYc2WyRfeWRdPL6XhzHxSAD%2BNXyVBO147kbMhYj2TiLZlknvhqHyHEexv6%2B2dkHuxhmWwltc%2FdKI2u%2FuyeYl5%2Flp2V0OIwT8iKOyvqNDWS2KS7iwpuXfMw%2B%2Femv2PsTw3C%2B%2F3%2FyVA5tZ2pjC8h%2FoXQeRjeOXm2TbgUc8429AkERvU8hSYDhDRuJnV%2BmDVNzMSsAxU7xOGLyCwM2PXQQtlOY9JzzwPQNHAxndt8v3PsD3xJhAFVNYa0PdEO7CeiC3TyVzEF3comD7YKHWg%3D%3D&webInteractiveContentId=172834896387&portalId=20095280) ## Related posts [![](https://blog.stpis.com/hs-fs/hubfs/shutterstock_2294806183-768x507stpblog.jpg?height=200&name=shutterstock_2294806183-768x507stpblog.jpg)](https://blog.stpis.com/blog/launching-a-hedge-fund-part-2-the-art-of-partner-selection) ## [Launching a Hedge Fund – Part 2: The Art of Partner Selection](https://blog.stpis.com/blog/launching-a-hedge-fund-part-2-the-art-of-partner-selection) ![Picture of STP Perspectives](https://blog.stpis.com/hs-fs/hubfs/STP_Logo_Color_Tag-2.png?width=50&name=STP_Logo_Color_Tag-2.png) [STP Perspectives](https://blog.stpis.com/blog/author/stp-perspectives) Sep 2024 When launching a hedge fund, assembling a team of key partners is critical to ensure the smooth... 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