Hedge Fund Inflows Sputter

May 10 2012 | 11:42am ET

Hedge funds managed just their fourth monthly inflow in the last nine in March, but still disappointed.

The industry took in $2.3 billion in March, according to TrimTabs Investment Research and BarclayHedge. The figure is sharply lower than the $6.8 billion hedge funds took in in February, and the $13.9 billion they took in last March.

The second-straight monthly inflow also didn't save the industry from a big first-quarter net outflow of US$3.2 billion.

Total industry assets now stand at US$1.8 trillion.

"Though asset growth rebounded in the summer of 2009, it petered out in May of 2010 and has been sliding even since, even as equity market asset prices remained resilient and surged strongly in Q1 2012," BarclayHedge's Sol Waksman said. The problem no doubt lies in part with the fact that hedge funds failed to surge strongly along with the broader markets.

"Hedge fund industry returns continued to lag popular financial industry benchmarks," TrimTabs founder Charles Biderman said.

Not all hedge fund strategies are suffering. The report shows that macro, fixed-income and Japan hedge funds have managed to attract investors.


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