Hedge Fund Redemptions Continue To Slow In March

Apr 14 2009 | 10:02am ET

Redemptions from hedge funds continued to fall in March, which outflows just a fraction of those suffered during the record-setting months of December and January.

Net investor redemptions and liquidations last month were $24 billion, according to HedgeFund.net. It is the third consecutive month that redemptions have slowed since peaking in December at $184.1 billion.

Hedge funds’ broadly positive performance in March helped blunt those losses further: The HFN Hedge Fund Aggregate Average rose 1.84% last month (0.52% for the quarter), earning the industry $6.4 billion in performance gains in March. All told, total hedge fund assets fell just 1.01% last month to $1.724 trillion in March.

That said, the industry is still 10.8% smaller today than it was at the beginning of the year, and 41% smaller than at its peak in June. Much of that decline can be blamed on funds of hedge funds, according to HFN, which made up a disproportionate number of fund closures. While funds of funds account for just 35% of HFN’s database, they made up 49% of recent closures.


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