The hedge fund industry is facing even bigger redemptions this year than those suffered last year, according to a new survey.
Fully one-third of hedge fund investors expect more than $200 billion to be pulled from the industry this year, almost 30% more than the record $155 billion outflow that hit the industry last year. More than four in five investors say that redemptions are the biggest issue faced by hedge funds, according to the Deutsche Bank survey.
Just a quarter of the 1,000 investors polled expect net inflows into hedge funds this year. Almost 70% of them expect industry assets to dip to $1.33 trillion by the end of the year, an 11% decline. The respondents, who have a combined $1.1 trillion in hedge fund assets, on average expect outflows from the industry of $168 billion.
“If 2008 was a story about performance of hedge funds, 2009 is very much going to be a story about restructuring,” Sean Capstick, global hedge of capital introduction at Deutsche Bank, said. “Our survey indicates redemptions will continue as a phenomenon for the foreseeable future.”