Hedge funds were battered by poor performance and skittish investors in the third quarter, as assets under management in the industry fell by $170 billion.
Net outflows from hedge funds were $18.6 billion, according to Lipper TASS. That, combined with widespread investment losses, left the industry with $1.63 trillion at the end of September, compared to $1.8 trillion at the end of the second quarter.
The biggest losers in terms of outflows were long/short equity, fixed-income arbitrage, multi-strategy and emerging markets funds. Some strategies, by contrast, managed to bring in new money in the difficult environment: global macro, managed futures, equity market-neutral and dedicated short bias.