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From Kirsten Bischoff, Opalesque New York:

For funds that offer quarterly liquidity, wires for third quarter investor redemptions will go out today. That meant yesterday many managers waited to see if investors who met redemption request deadlines earlier in the quarter (typically 30 or 60 days before quarter-end), might be swayed by news of strong performance and rescind their requests.

Although hedge funds managed to protect capital during a turbulent August, and likely made significant gains as the equity markets rose a record 8.8% in September, investors by and large have not been impressed during the months managers have underperformed against positive market upswings. Asset protection simply hasn't been a strong enough story. "Inflow for hedge funds has shown a clear deterioration on a monthly trend," reports Bank of America Merrill Lynch.

The small asset flows that have been seen this year flowed into the largest hedge funds. However, on some level even these funds have "stagnated" in their asset growth. Only 4 additional billion-dollar hedge fund firms exist than did at the beginning of the year, reported Absolute Return Magazine on Thursday. And even within this "billion dollar club" only the very largest firms - those with $5bn or more assets, have really seen significant asset growth. In fact, roughly one-third of the funds hold 71% of all the assets invested within funds larger than $1bn.

Michelle McCloskey, head of research at ......................

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