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Alternative Market Briefing Weekly

Opalesque Roundup: Hedge fund investors redeem like it's 2009: hedge fund news, week 04

Saturday, January 26, 2019

In the week ending September 25th 2019, a research by eVestment showed that the hedge fund industry assets under management plummeted by -$88.7bn. Investors removed -$19.64bn from the industry in December, bringing total 2018 investor redemptions to -$35.3bn, the second highest investor redemptions since 2009.

HFR data pointed to a drop of hedge fund assets to $3.11tn as of Dec. 31, down from the prior quarter record of $3.24tn due to investor redemptions, record equity market losses and overall market volatility. HFR said investors redeemed an estimated $22.5bn during the fourth quarter, bringing calendar-year outflows to $34bn, about 1% of industry capital.

Macro hedge fund Atreaus Capital is calling it quits, becoming the latest firm to succumb after years of poor performance.

The Hennessee Hedge Fund Index decreased -2.27% (-2.15% YTD) in December.

Research shows that smaller hedge funds beat the performance of their bigger rivals - due to the carrying capacity and higher transaction costs of having a large AUM, large funds struggle to keep up with the returns of smaller, nimbler funds and Concerns over hedge fund performance in Q4 2018 are short-term and dramatically overplayed, according to Sean Capstick, head of prime brokerage at GPP; Asia's hedge funds just had their worst year since 2008 and hedge fund manager David Einhorn, whose Greenlight Capital suffered its worst year ever in 2018, faced a wave of redemptions in recent months, pushing his assets below $3 billion.

However, Center Lake Capital generated gains of about 76%, net of fees and a small Japanese hedge fund Amulet Capital Management Co. enjoyed an average annual return of 22 percent over the past three years ......................

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