Investors Yank $9 Billion From Hedge Funds

Dec 13 2011 | 1:18pm ET

Investors pulled more from hedge funds than they have in more than two years in October, halting the industry's rise towards its pre-financial crisis asset level.

Clients redeemed some $9 billion in October, nearly three-and-a-half times as much as they pulled in September, according to BarclayHedge and TrimTabs Investment Research. The redemptions are the largest for the hedge fund industry since July 2009, when $17.8 billion was returned.

"Investors seem to have lost patience with lackluster hedge fund returns," BarclayHedge's Sol Waksman said.

It certainly took them long enough: Hedge funds have been down for most of the year, despite an uptick in October. The average hedge fund is down by about 4% this year, according to several industry indices.

October's redemptions cut the global hedge fund industry's size to $1.66 trillion, its lowest level in almost two years.

Long/short hedge funds, among the hardest-hit in terms of performance, took the biggest hit in terms of assets, with $2.6 billion in redemptions. Macro funds suffered $1.8 billion in redemptions while emerging markets funds lost $1.6 billion.

By contrast, multi-strategy funds brought in $1 billion in new capital.


In Depth

An Interview With Harvest Volatility Management's Rick Selvala

Mar 23 2017 | 5:39pm ET

Several years of extremely low interest rates have pushed some investors into equities...

Lifestyle

'Tis the Season: Wall Street Holiday Parties Back In Fashion

Dec 22 2016 | 9:23pm ET

Spending on Wall Street holiday parties has largely returned to pre-2008 levels...

Guest Contributor

SEI: Private Debt Coming Into Its Own

Mar 8 2017 | 9:24pm ET

The explosive growth of private debt over the past few years has caused the lines...