Report: Hedge Fund Industry Shrivels To Under $1T

Jan 15 2009 | 2:03am ET

The global industry is little more than half the size it was at the beginning of last year, according to a new report.

Hedge fund assets dropped 48% in 2008 to less than $1 trillion, according to TrimTabs Investment Research and BarclayHedge. The industry managed just $998.4 billion as of the end of December, the lowest total since July 2004, and down from $1.92 trillion at the beginning of last year. A big chunk of those losses, $148.8 billion, came in the form of year-end redemptions.

But redemptions, of course, were not the only culprit: The average hedge fund lost almost 20% last year, according to several industry indices. And that has left many hedge funds in something of a cash crunch.

“Approximately two-thirds of industry revenue comes from performance fees and we estimate that 81 percent of hedge funds were under water last year,” TrimTabs CEO Charles Biderman said in a statement.

Another research firm, HedgeFund.net, said earlier this week that the hedge fund industry posted its biggest annual decline ever in 2008, shedding 36% of its assets. HFN said the global hedge fund industry managed $1.84 trillion at the end of December.


In Depth

Q&A: TCA Fund Management's Bob Press on Small-Cap Private Equity

Aug 25 2016 | 8:55pm ET

The emergence of private credit as a replacement for traditional bank financing...

Lifestyle

Kiawah: Island Reversal

Aug 24 2016 | 9:59pm ET

Looking for real estate investments but the typical real estate fare isn’t cutting...

Guest Contributor

Old Hill Partners: Embrace Illiquidity

Aug 9 2016 | 2:39pm ET

The age-old financial concept that higher yields are the result of higher risk and...