Investors Pull $11 Billion As Hedge Funds Fall 0.5%

Mar 11 2009 | 2:52am ET

Investors continued to pull money from hedge funds in February, as most hedge fund strategies lost ground in the year’s shortest month.

Hedge funds were hit by about $11 billion in redemptions last month, according to preliminary figures from Eurekahedge. The decline, while disappointing, are a mere drop in the bucket compared to the second half of 2008, when the industry shrank by $400 billion. February’s outflow was only about one-third the size of January’s.

Based on the 41% of the funds that have reported to Eurekahedge already, the firm estimates that hedge funds lost 0.5% on average in February, leaving the Eurekahedge Hedge Fund Index down 0.4% on the year.

Five of nine strategies tracked by Eurekahedge fell in February. Relative value funds lost 1.7%, long/short funds 1.2% and distressed debt funds 1.1%. Those in positive ground included macro funds, up 1%, multi-strategy funds, up 0.8%, and fixed-income funds, up 0.7%.

Regionally, Japanese hedge funds were the worst performers, losing 2.1% on average, with North American funds dropping 0.9% and Asian and European funds falling 0.7% each. Only Latin America funds were in the black, rising 0.7% in February.


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