New York – At least 83 U.S. hedge funds — which had at their collective peak been managing about $35 billion — shut their doors in 2006, according to a survey published in the March issue of Absolute Return.

The largest of the closures was Amaranth Advisors’ Amaranth LLC, which also made history as the biggest-ever hedge fund shutdown. The $9.1 billion multistrategy fund founded by Nick Maounis failed after losing most of its capital to highly leveraged bets on natural gas.

But while it dominated the headlines, Amaranth was not the only multistrategy or multiarbitrage fund near the top of the 2006 closure list. Others included Archeus Capital Management’s Animi Master Fund, which had peaked at $2.65 billion, Sagamore Hill Capital Management’s Sagamore Hill, which once held about $2.6 billion, and Saranac Capital Management’s Citigroup Multistrategy Arbitrage/Saranac Arbitrage, which topped out at $2.2 billion.

Rounding the top 10 closures were BKF Asset Management’s event-driven Levco Alternative Investment Fund, which peaked at $1.9 billon; Ritchie Capital Management’s Ritchie Energy Trading, which once held $1.2 billion; Saranac’s Citigroup Archer/Saranac Total Return, which ran as much as $1.1 billion; MacKay Shields Long/Short, a fixed-income fund that had run $1 billion; Mangan & McColl Partners event-driven M & M Arbitrage, which had peaked at $1 billion, and Harbert Management Corp.’s Harbert Convertible Arbitrage Fund, which had run $900 million.

Together, the top 10 shutdowns managed peak assets of $23.6 billion – the bulk of the assets run by the shuttered funds. But in a reflection of the continuing bifurcation of the hedge fund industry that favours the largest firms, 39 of the closed funds, or 47%, never reached $50 million of assets. Just 44 of the closures ever made it to $50 million or more, roughly in line with the 43 funds that Absolute Return found had run $50 million or more before closing in 2005. But none of the 2005 closures had ever reached $1 billion of assets.

In other results, the investment strategy that produced the largest number of closings was U.S. long/short equity, with 27 shutdowns, including Saranac’s Citigroup Archer/Saranac Total Return. Other strategies with high casualty rates were fixed income and high yield funds, six of which closed, and long/short biotech equity funds, which also produced six closures.

*Estimate