Lipper: Hedge Fund Outflows Continue, But Slow

Jun 9 2009 | 12:17pm ET

Hedge funds continued to hemorrhage assets in the first quarter, but better times are ahead, according to a new report from Lipper.

Hedge fund outflows totaled $115.7 billion in the first three months of the year. Outflows slowed significantly from the fourth quarter of last year, dropping by 21%, but the first quarter was still the second-worst in terms of outflows in 15 years.

All strategies posted outflows during the quarter, but equity long/short funds were the hardest hit, with $34 billion evaporating. All told, hedge fund managed $1.18 trillion at the end of March, down from $1.29 trillion at the beginning of the year.

Lipper blamed the lifting of redemption restrictions for the continued outflows. But the report suggests that outflows will continue to slow this quarter, and that hedge fund might actually begin to take in new money by the third quarter.

The report said that larger institutional investors, especially pension funds, are beginning to come back to the hedge fund industry.


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