Some 2,073 funds opened last year, while 848 funds liquidated in 2005, compared to 1435 launches and 296 closures in 2004, according to the data, published on Tuesday by Hedge Fund Research.
The San Francisco-based analysts noted that the 2005 attrition rate of 11.4 per cent is the highest on record, but also argued that the industry has boomed in recent years, with around 8,000 managers governing $1 trillion US in assets.
"The data show that this remains an enormously active marketplace, with new funds entering and exiting at a higher rate than ever before," HFR president Josh Rosenberg declared.
"But it is also an unforgiving environment, as the current record level of attrition shows."
Nevertheless, HFR's study contradicts research released last month on the same subject, by Hennessee Group LLC, which showed a reduction in 2005 closure rates.