Hedge Funds Lose $350B To Poor Performance, Redemptions

Jan 14 2009 | 12:38am ET

The global hedge fund industry contracted by almost 20% last year, with $350 billion falling victim to the twin terrors of poor performance and investor redemptions.

Hedge funds now manage about $1.5 trillion, according to preliminary estimates by Eurekahedge. The industry once boasted as much as $1.9 trillion in assets under management.

Most of the asset evaporation took place during the last quarter, when 90% of the money was lost. On the year, Eurekahedge estimates that the average hedge fund lost 12.3% of its value as the credit crisis battered most asset classes.

Most of the lost assets came from North American hedge funds, which saw $183 billion disappear, Eurekahedge said.

Eurekahedge’s estimates are based on reports from 39% of the funds that disclose their performance to the data provider, which means that the figures could get worse. Poor performers tend to report their performance later than those doing relatively better.


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Chicago-based independent futures brokerage and clearing firm R.J. O’Brien & Associates (RJO) has hired industry veteran Daniel Staniford as Executive Director, responsible for the firm’s institutional business development in New York and London.

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