Tuesday, 1 December 2015
Last updated 8 hours ago
Dec 11 2012 | 10:24am ET
Hedge fund investors yanked more than $10 billion from the industry in October—although they seem to be picking their spots in the right places.
Total redemptions were $10.8 billion in October, TrimTabs Investment Research and BarclayHedge report, or 0.6% of total industry assets, which stand at $1.8 billion. The outflow swamped the combined $9.8 billion inflow enjoyed by the industry in August and September.
"From a cash-flow standpoint, the hedge fund industry has been losing ground for the past year," BarclayHedge's Sol Waksman said. "October's redemptions pushed year-to-date outflows to $13.7 billion and 12-month outflows to $22.9 billion."
But investors aren't stupid, the report shows. They are sticking with the best-performing hedge funds and fleeing the worst.
"Hedge fund investors are doing fine if they're buying into the best-performing funds," TrimTabs founder Charles Biderman said. "Also, the massive outflows from the lowest-performing funds show investors are losing patience with the subpar returns that have plagued the industry over the past year."
Indeed, the top 10% of hedge funds by performance—median return of 23.5% over the past 12 months—have actually taken in $4.8 billion in new cash. The worst 10%—median loss of 11.2%—have lost $6.3 billion to redemptions. The bottom two quintiles of hedge funds in terms of performance have suffered $25.2 billion in outflows, while the top two quintiles have lost just $3 billion.
Oct 21 2015 | 10:41am ET
One of the most unique charity benefits in the hedge fund industry, A Leg To Stand On's (ALTSO's) Hedge Fund Rocktoberfest - NYC, raised nearly $500,000 last Thursday thanks to the generous support of major sponsors and nearly 1,400 attendees from the Tri-State finance, business and hedge fund communities. Read more…