In first half of the year, 461 funds shut their doors, the report said, citing research from Hedge Fund Research Inc.
If liquidations continue at that rate, they'll outpace the 1,023-closure record from 2009, the report said.
Even big firms are closing down funds. Brevan Howard, for example, just shut down a $630 million commodities fund.
Part of the problem is the low return rate for hedge funds across the board - just 2 percent on average in 2014, according to Bloomberg data.
But smaller funds are getting hit even harder as investors gravitate toward bigger, better-known names.
Macro funds have it bad too, returning on average less than 1 percent this year, Bloomberg reported.
No wonder everybody's jumping ship.