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Alternative Market Briefing

Hedge funds redeem $20.7bn in October, pushing AUM below $3tn

Friday, December 21, 2018

Laxman Pai, Opalesque Asia:

Hedge fund redemptions slowed in October after spiking to a five-year high the month before, according to the Barclay Fund Flow Indicator.

Barclay said the redemptions from hedge funds hit $20.7bn (-0.7% of assets) in October, a month after outflows surged to a five-year high of $39.1bn (-1.3% of assets).

Hedge fund industry (excluding CTAs) assets sank to an eight-month low of $2.97tn. Hedge fund investors' skepticism waned in October even as the market climate darkened around the globe, according to the Barclay Fund Flow Indicator, a monthly big-picture report on the health of the alternative investments industry.

A press release from BarclayHedge, now a division of Backstop Solutions, quoted its founder and president Sol Waksman as saying: "The prospects of rising interest rates, a strengthening dollar and persistent trade turmoil undoubtedly kept investors on edge in October."

"Year-to-date hedge fund flows sank into negative territory in October with redemptions of $17.9bn (-0.6% of assets)," Waksman said. "By contrast, the industry raked in $89.6bn (3.2% of assets) in the first 10 months of 2017."

At the sector level, Sector Specific funds had the biggest 12-month inflows at $14.3bn (10.3% of assets). Macro funds had the largest 12-month redemptions at $12.0bn (-5.4% of assets).

At the regional level, hedge funds based in the U.S. and Canada added cash in October, while European, Latin American, Chinese and Jap......................

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