Thu, Aug 17, 2017
A A A
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Industry Updates

Hedge fund redemptions more than triple in october; assets fall for third consecutive month

Monday, December 12, 2011
BarclayHedge and TrimTabs Investment Research reported today that hedge fund redemptions in October were $9 billion, more than triple September's $2.59 billion outflow. Industry assets decreased to $1.66 trillion in October from $1.73 trillion in September, the third straight monthly decline.

"Investors seem to have lost patience with lackluster hedge fund returns,"says Sol Waksman, founder and President of BarclayHedge. The Barclay Hedge Fund Index did rise 3.5% in October, bouncing back from five straight monthly declines. Assets are at their lowest since January 2010.

For October, the biggest assets losses in terms of percentage were from Macro funds, down 1.6%, or $1.8 billion and Equity Long/Short funds, down 1.5% or $2.6 billion. The only funds with inflows were Equity Long Bias funds and Merger Arbitrage funds. The former, had the largest inflows, up 0.6% or $600 million, said Leon Mirochnik, analyst at TrimTabs. Merger Arbitrage hedge funds posted the second-highest inflow at $200 million (1.0% of assets).

"This is the second-straight inflow in this strategy, which had considerable outflows in the previous 10 months, said Mirochnik, adding, "These funds posted the heaviest outflow in the past 12 months at over $5 billion (31.8% of assets) while posting the second highest return out of all categories at 2.6%."

Hedge funds based in Latin America have returned 3.9% in the past year, the best performance of all the regions tracked by BarclayHedge and TrimTabs. Nevertheless, they lost 6.8% of their assets this year. U.S. funds gained 4.6% of assets in the past year while returning 2.3%, the second-best performance of all regions tracked.

In contrast, hedge funds based in Asia excluding China and Japan raked in 21.0% of assets in the past year, the heaviest inflow of the regions tracked by BarclayHedge and TrimTabs. This could be partially attributed to the fact that these funds posted a 13.3% return last year, though they have posted a flat return this year.

"This is not surprising to us, as investors frequently gain interest only after a period of exceptional performance," notes Mirochnik. "The cliche is often all too true: the 'What have you done for me lately' crowd often mistimes its investment entry points."

The latest TrimTabs/BarclayHedge Survey of Hedge Fund Managers reveals that managers have become less bearish on domestic equities in the past four weeks. Bearish sentiment on the S&P 500 decreased to 35.9% in November from 41.4% in October, while bullish sentiment dipped from to 34.5% from 31.4%. The survey of hedge fund managers also reveals that the managers are overwhelmingly optimistic that the euro will survive the sovereign debt crisis plaguing Europe, though they have no illusions about the short-term fate of the euro's value: nearly 65% recommend shorting the euro vs. the dollar for the remainder of 2011.

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. Opalesque Exclusive: Albright Capital puts a value lens on emerging markets[more]

    Bailey McCann, Opalesque New York: Over the past decade, investors have steadily increased investments in emerging markets private funds. Allocations to the cohort have increased from $93 billion in December 2006 to $564 billion in September 2016, according to data from research firm Preqin. Howe

  2. Other Voices: Crisis risk offset; about time?[more]

    This article was authored by Russell Barlow, global head of hedge fund solutions at London-based Aberdeen Asset Management. Like the ubiquitous force of gravity, when financial markets rise they must fall. The quest

  3. Comment: "Long-Term Investing": What managing drawdown risk can do to your long-term returns[more]

    Matthias Knab, Opalesque: Real Investment Advice writes on Harvest Exchange: Last week, I was having lunch with a prospective portfolio management client discussing the curre

  4. Jasper Capital International joins Hedge Fund Standards Board[more]

    Komfie Manalo, Opalesque Asia: Diversified and systematic investment firm Jasper Capital International has become the second China-based signatory to the Hedge Fund Standards Board (HFSB), an organization that brings hedge fund managers and investors together to set standards for the hedge fund i

  5. Investing - Hedge-fund honchos including David Tepper are loading up on Alibaba, Billionaire hedge fund manager Stanley Druckenmiller is betting big on the Chinese consumer, Big-name U.S. hedge funds shed healthcare stocks during the rally in second-quarter, U.S. hedge funds bearish on FAANG stocks in second-quarter, Hedge fund titan Viking Global made a $680 million bet on scandal-plagued Wells Fargo[more]

    Hedge-fund honchos including David Tepper are loading up on Alibaba From CNBC.com: David Tepper's Appaloosa Management and three other he ge funds took new stakes in Chinese e-commerce giant Alibaba in the second quarter, according to the latest quarterly filings. Appaloosa disclos