Mid-Sized Hedge Funds Benefit From Inflow

Dec 16 2009 | 9:32am ET

Investors have begun pouring billions back into hedge funds, but the industry’s smaller players are being left out in the cold.

Hedge funds took in more than $150 billion from investors over the first three quarters of the year, according to a new report from Barclays Capital. But that new money was far from evenly distributed, and most hedge funds are still managing much less money than they were at the peak.

Funds with between $5 billion and $10 billion in assets saw a 5% positive net flow, according to the report. Larger funds were basically flat. But smaller hedge funds were hammered.

Those with less than $1 billion suffered a 16% outflow. Hedge funds with between $1 billion and $5 billion were hit by a 12% outflow.

All told, the average hedge fund manager is managing 32% less today than at their peak, Barclays said.

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