Does size matter in predicting hedge funds’ liquidation?

Adrien Becam, Andros Gregoriou, Jairaj Gupta

Research output: Contribution to journalArticlepeer-review


In this study, we propose a set of covariates that exploit information content of hedge funds’ relative size, performance, growth, tail risk, and past liquidation rate, in predicting their liquidation. Empirical results show that our proposed covariates exhibit significant predictive power for up to two years even when we control for fund specific characteristics. Furthermore, we estimate separate liquidation prediction models for small, medium, and large funds. Our findings suggest that liquidation likelihood of hedge funds is inversely related to fund size, and statistical significance of factors affecting their liquidation vary across different size categories.
Original languageEnglish
Pages (from-to)271-309
JournalEuropean Financial Management
Issue number2
Publication statusPublished - 8 Feb 2018

Bibliographical note

This is the peer reviewed version of the following article: Adrien Becam, Andros Gregoriou and Jairaj Gupta, Does size matter in predicting hedge funds' liquidation? European Financial Management, 2018, which has been published in final form at This article may be used for non-commercial purposes in accordance with Wiley Terms and Conditions for Self-Archiving.


  • hedge fund
  • liquidation
  • fund size
  • failure
  • default


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