Hedge Funds Hit With Biggest Outflow Since ‘01

Jun 11 2008 | 11:25am ET

Too little, too late: Hedge funds rebounded in April, but investors still fled the asset class in the biggest outflow the industry has suffered in more than six years.

Investors yanked $5.9 billion from U.S. hedge funds in April, according to new data from TrimTabs Investment Research and BarclayHedge. The outflow was the industry’s first since December 2005, and the biggest since October 2001.

Investors punished single-manager funds especially, pulling $9.4 billion. Funds of hedge funds, for their part, won $3.5 billion in new money.

“April’s outflow from hedge funds was not surprising because hedge funds underperformed the S&P 500 in both March and April,” Sol Waksman, CEO of BarclayHedge, said. “Market volatility and weak inflows into funds of hedge funds suggest hedge fund flows were also depressed in May.”

Hedge funds took in $41.2 billion in new money in the first quarter.

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