Wed, Sep 2, 2015
A A A
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Industry Updates

Hedge Funds Post Outflow of $3.5 Billion in April; Hedge Fund Managers Expect Debt Crisis to Worsen According to Survey

Wednesday, June 09, 2010
Opalesque Industry Update - TrimTabs Investment Research and BarclayHedge reported that the hedge fund industry posted an estimated outflow of $3.5 billion, or 0.2% of assets, in April 2010, the third outflow in five months. Strong performance has added $338 billion to hedge fund coffers in the past year, lifting industry assets to $1.65 trillion, the highest level since November 2008.

“Recent flow weakness is surprising,” said Sol Waksman, CEO of BarclayHedge. “Industry performance has been stellar, and April is historically a strong month for subscriptions.”

The TrimTabs/BarclayHedge Survey of Hedge Fund Managers for May reveals that 52% of 143 respondents are bearish on the S&P 500, while only 16% are bullish. Alternately, they like the greenback — 49% are bullish on the U.S. dollar index, while only 15% are bearish. Additionally, 46% of managers think the rescue package the European Central Bank and the International Monetary Fund announced on May 10 will have negative long-term effects on the European debt crisis. Only 27% of managers believe the bailout will have a positive long-run impact.

“The bailout received a cool greeting, even within the eurozone,” said Vincent Deluard, Global Equity Strategist at TrimTabs. “The ‘shock and awe’ rescue package is unlikely to prevent speculators from attacking European currencies and punishing heavy debtors.”

In April, funds of hedge funds received money for the first time since November 2009, while commodity trading advisors posted a second straight inflow. Event-driven funds took in $2.1 billion in April, more than any other hedge fund strategy, while fixed income funds redeemed $2.5 billion, one of the largest outflows. Event-driven funds boast a year-to-date return of 5.8%, one of the best performances of all strategies.

“Hedge fund investors continued to shift into riskier strategies in April,” noted Deluard. “They returned to chasing performance after a year during which they exercised extreme caution.”

The TrimTabs/BarclayHedge Hedge Fund Flow Report shows that the volatility of macro hedge fund returns fell to an all-time low in April, while leverage surged. Meanwhile, many funds are positioned in handful of similar trades.

“High leverage and herd behavior make for a potentially dangerous cocktail,” cautioned Deluard. “Popular trades turning sour when everybody’s betting the same way could produce painful mass liquidations.”

The TrimTabs/BarclayHedge database tracks hedge fund flows on a monthly basis. The TrimTabs/BarclayHedge Hedge Fund Flow Report provides detailed analysis of these flows as well as relevant topical studies. Click here for further information.

BarclayHedge is a leading hedge fund data vendor and one of the foremost sources for proprietary research in the field of alternative investments. From its origin as a research specialist and performance measurement firm, BarclayHedge has developed complete client services as a publisher, database and software provider, and industry consultant.

TrimTabs Investment Research is the only independent research service that publishes detailed daily coverage of U.S. stock market liquidity--including mutual fund flows and exchange-traded fund flows--as well as weekly withheld income and employment tax collections. Founded by Charles Biderman, TrimTabs has provided institutional investors with trading strategies since 1990. Source
KM

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. Cliff Asness attracts $360 million as liquid alternative funds hold up[more]

    From Bloomberg.com: As U.S. stocks suffered their worst month in more than three years in August, Clifford Asness’s managed futures fund was able to profit. Investors are taking notice. The $9.12 billion AQR Managed Futures Strategy Fund pulled in an estimated $360 million in net subscriptions last

  2. Performance - Einhorn and Loeb's hedge funds both decline 5% in August, Some target-date funds miss in the market turmoil[more]

    Einhorn and Loeb's hedge funds both decline 5% in August From Reuters.com: Hedge fund billionaires David Einhorn and Daniel Loeb saw their main funds lose roughly 5 percent in August during a dramatic market sell off, two people familiar with their returns said on Monday. Einhorn's

  3. Opalesque Exclusive: When the SEC calls, fund managers need to get out of their own way[more]

    Bailey McCann, Opalesque New York: New pressure is hitting alternative investment funds from all angles. So far this month both hedge fund and private equity players have seen enforcement actions, and subsequent fines over fees, disclosures, and misleading statements. Citi one of the biggest

  4. Fortress hedge fund manager David Dredge says markets trouble on the way[more]

    From AFR.com: David Dredge of global hedge fund Fortress has built a career studying, predicting and protecting against the world's major financial crises. The recent convulsions in global sharemarkets are "just the beginning" of a painful adjustment as money drains from the emerging market economie

  5. North America - Puerto Rico agency plans talks with hedge fund creditors[more]

    From WSJ.com: Puerto Rico’s Government Development Bank is planning to begin confidential debt-restructuring talks with hedge funds that own its bonds as early as next week, said a person familiar with the matter. The parties are set to discuss a plan under which the investors would lend additional

 

banner