Tue, Feb 20, 2018
A A A
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Industry Updates

Investors balk at hedge funds’ losses in June and redemptions rise

Monday, July 11, 2011
Opalesque Industry Update – While net inflows continued into May (according to TrimTabs Barclayhedge – see previous coverage here: Source), HFN is reporting that investors are showing their displeasure with negative performance by increasing the rate of redemptions in June. The firm reported on Monday that estimates for asset flows following the June -0.99% performance drop saw an increase to $6.4bn, outpacing allocations for the first time in a year.

At the mid-year mark, hedge funds are mostly flat, the HFN Hedge Fund Aggregate Index stands at +0.63%, while the S&P Total Return Index is +6.02% YTD.

While industry losses are primarily performance driven in June (which does nothing to ease the pain), the mid-year mark does typically see an increase in redemptions as large investors rebalance portfolios.

Beta neutral strategies were amongst the top performers for the month according to the HFN indices:

HFN Statistical Arbitrage +1.29%

HFN Options Strategies +0.96%

HFN Merger/Risk Arbitrage +0.46%

HFN also reported most equity strategies were slightly down in June (-0.54%). Equity market neutral funds managed to be up slightly (+0.19%) and Opalesque has learned of a few that notched stronger performance than their peers, such as The Midway Market Neutral Fund that let investors know it was +1.75% in June (estimated) and +22.09% YTD.

Commodities, which have, according to BarclayHedge/TrimTabs seen the bulk of asset inflows in recent months have also slid into negative territory in June with the HFN CTA/Managed Futures Index at -2.71% for the month and -2.96% YTD.

After a year of investors showing increasing confidence in both the markets and the vehicles, the first month where redemptions outpace allocations could mean that July 2011 performance returns will mark a turning point for the industry. It may be the moment where investors decide whether or not hedge fund managers are worthy of the portfolio exposure (and the fees) they have been clamoring for.

Kirsten Bischoff

What do you think?

   Use "anonymous" as my name    |   Alert me via email on new comments   |   
Today's Exclusives Today's Other Voices More Exclusives
Previous Opalesque Exclusives                                  
More Other Voices
Previous Other Voices                                               
Access Alternative Market Briefing

 



  • Top Forwarded
  • Top Tracked
  • Top Searched
  1. Chenavari, a $5.4bn hedge fund, told investors it thinks 'we could experience a similar pattern as the 1987 crash'[more]

    From Businessinsider.com: A $5.4 billion hedge fund told clients markets could tumble just like they did in the 1987 crash. In a February 14 letter to clients, London-based Chenavari Investment Managers warned about current market conditions. From the letter (emphasis added): "Our view is that

  2. Investing - Hedge fund Bridgewater makes $22 billion bet against European firms, Hedge funds Steadfast and Suvretta jump onto CSX in fourth quarter, Tepper's Appaloosa boosts Apple, Facebook as others bolt, Third Point buys Netflix and MGM, dumps Bank of America, Moore Capital bought Wynn Resorts, other casino stocks before Steve Wynn resigned[more]

    Hedge fund Bridgewater makes $22 billion bet against European firms From Reuters/USNews.com: Bridgewater has shown its hand in Europe with a $22 billion bet against some of the continent's biggest companies, filings reviewed by Reuters show, part of a bigger shift by the world's largest

  3. Funds Profiles - Brother-run hedge fund up 46% in 2017 says Kelly formula shows diversification is flawed, How a 6,000% profit on a single trade saved a small hedge fund from disaster[more]

    Brother-run hedge fund up 46% in 2017 says Kelly formula shows diversification is flawed From Valuewalk.com: When Jeremy and Michael Kahan consider the notion of diversification, the wince. With a return of 45.8% to end 2017, their stock-picking fund, North Peak Capital, successfully

  4. Investing - Hedge funds hook shipping stocks grappling for recovery, Small cap hedge funds offer alternative for cannabis investing, Top stock-picking hedge funds love gaming, health care and media shares, Hedge funds Steadfast and Suvretta jump onto CSX in fourth quarter[more]

    Hedge funds hook shipping stocks grappling for recovery From Hellenicshippingnews.com: Shipping stocks may still be in the doldrums in the view of many investors, but hedge funds have bet at least $675 million on signs of renewed buoyancy in the industry. Hedge funds made initial f

  5. Art & Motion launches collectible car alternative investment vehicle[more]

    Komfie Manalo, Opalesque Asia: Luxembourg-based Art & Motion has launched a new investment vehicle dedicated to vintage cars and exceptional high-quality vehicles as this collectible market has grown exponentially the turn of the centu