Performance Losses, Redemptions Take Their Toll In Nov.

Dec 11 2008 | 4:43am ET

Hedge funds continued to lose money in November, but redemptions far outpaced investment losses as the source of the drawdowns.

Hedge fund assets fell by 5.2% last month to $2.11 trillion, according to HedgeFund.net. Most of the decline was due to $130.04 billion in redemptions, but the average hedge fund continued its downward spiral during the month. The HFN Hedge Fund Aggregate Average fell by 0.47% in November, and is down 14.75% on the year.

Another industry estimate, from Eurekahedge, shows the industry losing $64 billion in assets. Redemptions were responsible for $46 billion of the losses, while performance losses accounted for $18 billion (the Eurekahedge Hedge Fund Index fell by 0.4% last month, according to early estimates, although the firm says losses could reach 2% on the month). According to Eurekahedge, hedge funds manage $1.59 trillion.

Distressed hedge funds were the worst-performing strategy in November, according to HFN, shedding 6.63% on the month (down 26.21% year-to-date). The year’s worst-performing strategy, long-only, fell 4.67% last month (down 41.74% YTD). Other strategies struggling through Thanksgiving included technology (down 3.96%, down 21.08% YTD), small- and micro-cap (down 3.77%, down 28.51% YTD), convertible arbitrage (down 3.51%, down 26.13% YTD) and event-driven (down 3.04%, down 19.46% YTD).

Following long-only funds in the race for this year’s booby prize are emerging markets funds (down 2.78% in November, down 36.91% YTD) and energy funds (down 1.55%, down 33.36% YTD).

A handful of strategies—nine, to be exact—actually posted positive returns last month. Short-bias vehicles continued to profit from the declining stock market, adding 4.71% in November, leaving them up 34.71% on the year, on average. Healthcare and fixed-income funds also did well last month, rising 3.24% (down 12.58% YTD) and 2.36% (down 10.69% YTD), respectively.

Other than short-bias, just three of the strategies tracked by HFN are in the black year-to-date: CTA/managed futures funds (up 1.96% in November, up 11.72% YTD), asset-based lending (up 0.53%, up 5.97% YTD) and statistical arbitrage (up 2.18%, up 4.27% YTD).


In Depth

Q&A: Schroders’ Forest Discusses Multi-Asset Investments On Eve Of U.S. Launch

Jul 17 2014 | 8:05am ET

Global investment manager Schroders has $446 billion in assets under management, $...

Lifestyle

Einhorns Busts At WSOP, Finishes In 173rd

Jul 15 2014 | 10:48am ET

Greenlight Capital founder David Einhorn’s World Series of Poker won’t end at...

Guest Contributor

Common Risk Parity Misperceptions

Jul 16 2014 | 11:02am ET

Over the past few years, risk parity has become a component of most investors’...

 

Sponsored Content

    Northern Trust Helps Hedge Funds Navigate Derivatives Regulations

    Jul 8 2014 | 10:48am ET

    The surge in derivatives regulation is among the most complex challenges facing the financial services industry today. Northern Trust’s Joshua Satten recently spoke with FINalternatives to share insights into the challenges presented by new regulation and explore how the industry is responding. Read more…

Publisher's Note