Hedge Fund Liquidations Lower than Average for 2005

February 23, 2006 (PLANSPONSOR.com) - Hennessee Group LLC has announced that the 2005 Hennessee Hedge Fund Index attrition rate was 3.9%.

This number is below the seven year average annual attrition rate of 4.9%, according to the announcement.   Hennessee lists the attrition rate for the past seven years as follows:

1999 – 4.7%

2000 – 6.4%

2001 – 4.3%

2002 – 3.8%

2003 – 5.3%

2004 – 5.9%

2005 – 3.9%

“It has been reported that hedge funds have a 15% failure rate, with many hedge funds entering the marketplace due to low barriers to entry, followed by liquidation due to poor performance,”stated Charles Gradante, Managing Principal of Hennessee Group LLC, in the announcement. “Our findings using the Hennessee Hedge Fund Indices do not support the perception that the hedge fund attrition rate is 15% as this number likely includes hedge fund managers who close to new capital, but are still in business.”

The Hennessee Hedge Fund Index attrition rate includes hedge funds with assets greater than $10 million that have liquidated, either for poor performance or career choices, such as manager retirement.   It does not include hedge funds that are currently operating, but are closed to new capital.