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From Kirsten Bischoff, Opalesque New York:
The combination of impressive performance numbers during 2009 and returning investors has allowed the hedge fund industry to slow the hemorrhaging of assets. According to analysis from the team at Credit Suisse Tremont Hedge Index (CST Hedge Index), including performance gains, total industry assets rose slightly from between June and September to reach $1.4tln.
However, in order for managers to begin seeing significant asset growth the industry is going to have to address the issues of illiquidity that arose during 2008 and that still haunt investors today.
There were cases where investors thought they had liquidity, and there were cases where terms were changed, and the industry needs to regain that trust, said Credit Suisse Tremont Hedge Index President Oliver Schupp during a meeting this week with reporters.
CST Hedge Index reports liquidity has improved since the end of 2008. Hedge funds that continue to offer their standard liquidity (according to the terms of their offering documents) have climbed from 88.4% to 91.5%; hedge funds that have imposed gates have declined from 2.8% to 0.1%; and hedge funds that have suspended redemptions altogether have dropped from 7.1% to 6.2%.
Since the end of last year, the only liquidity impairment within the industry that have grown is the use of side pocket vehicles, the use of which has increased from 1.7% to ...................... To view our full article Click here
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