Thu, Jun 4, 2020
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Industry Updates

Hedge fund redemptions jump to to $85.6bn in March

Tuesday, May 19, 2020
Opalesque Industry Update - The hedge fund industry felt the impact of the spreading COVID-19 pandemic in March as hedge fund redemptions jumped dramatically to $85.6 billion, a steep increase from February's $8.1 billion in industry outflows.

March's redemptions represented 2.7% of industry assets, according to the Barclay Fund Flow Indicator published by BarclayHedge, a division of Backstop Solutions.

A March trading loss of trading loss of $229.1 billion brought total hedge fund industry assets to $2.86 trillion as April ended, down from $3.21 trillion at the end of February.

Data from 7,100 funds (excluding CTAs) in the BarclayHedge database showed Continental Europe as the hardest hit region in March's redemption total with nearly $38.3 billion in outflows. U.S. hedge funds shed nearly $31.6 billion in assets, while funds in the U.K. experienced nearly $24.7 billion in redemptions.

"As the magnitude of the COVID-19 crisis became increasingly clear through January and February, equity market volatility increased, oil prices plunged and the economic fallout mounted," said Sol Waksman, president of BarclayHedge. "Ultimately that volatility left investors with shrinking risk appetites and many decided it was time to hold cash. The result was hedge fund redemptions hitting their highest levels since the 2008-09 financial crisis."

Over the 12-month period through March the hedge fund industry experienced $159.2 billion in redemptions. A $142.8 billion trading loss over the period brought industry assets to nearly $2.86 trillion at the end of March, down from $3.01 trillion a year earlier.

A handful of hedge fund sectors finished the month with 12-month inflows. Among them, Event Driven funds set the pace with $27.8 billion in inflows, 19.7% of assets, while Sector Specific funds brought in $7.6 billion, 4.4% of assets. And Convertible Arbitrage funds - the only sector to experience inflows in March - added $2.6 billion, 13.7% of assets over the 12 months.

On the 12-month redemptions side of the ledger, among those experiencing the largest outflows were Equity Long/Short funds with $40.2 billion in redemptions, 19.2% of assets, over the period, Fixed Income funds which shed $38.4 billion, 6.6% of assets, Equity Long Bias funds with $24.6 billion in redemptions, 7.4% of assets, and Macro Funds with $15.1 billion in outflows, 8.1% of assets.

The managed futures industry's experience was similar to hedge funds in March with $19.0 billion in redemptions, up significantly from $1.7 billion in February outflows. A $9.3 billion monthly trading loss left industry assets at $278.0 billion as March ended, down from $307.9 billion at the end of February.

Managed futures funds in all regions of the world but one experienced redemptions in March. Funds in China and Hong Kong were the exception, bringing in $34.5 million, 8.1% of assets. The greatest redemptions were from CTAs in the U.S. and its offshore islands which shed $14.4 billion, 7.3% of assets. They were followed by managed futures funds in Continental Europe which experienced $3.3 billion in redemptions, 10.0% of assets, and the U.K. and its offshore islands with $2.2 billion in outflows, 3.5% of assets.

Over the 12-month period through March, CTAs experienced $32.4 billion in redemptions, 10.0% of assets. A $4.6 billion trading loss over the period contributed to the drop in total industry assets to the $278.0 billion level at the end of March from $322.9 billion a year earlier.

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. Investing: Millennium hedge fund ups bet against Bank of Ireland, Value rotation was the last thing big funds thought would happen, Al Gore's firm sold Amazon and Microsoft stock. Here's what it bought.[more]

    Millennium hedge fund ups bet against Bank of Ireland From Independent: US hedge fund Millennium International Management has raised its bet against Bank of Ireland's shares. It comes as Davy says 2020 will be a write-off for banks, with losses across Irish lenders of €4bn. M

  2. PE/VC: Private equity in the Covid-19 crisis, Carlyle's Africa dealmakers leave to start their own buyout firm, UK asset managers plan shift to off-market strategies including private equity[more]

    Private equity in the Covid-19 crisis From Morning Star: Private equity investment trusts invest in unquoted companies not yet listed on the stock market. How have they fared in the sell-off? Investment trusts have been caught up in the market turmoil of recent months and private equit

  3. New Launches: Apeira Capital seeks $200m for hedge fund-like bets, PIMCO filing reveals ESG fund launch could be ahead, BEA Systems co-founder launches venture fund, Salesforce Ventures launches $125m Europe Trailblazer Fund, The D. E. Shaw group closes first onshore China investment fund, Legg Mason and ClearBridge launch non-transparent ETF, Hong Kong-based asset manager MaiCapital launches actively managed bitcoin hedge fund[more]

    Apeira Capital seeks $200m for hedge fund-like bets From Bloomberg: Natalie Hwang, the former head of Simon Property Group Inc.'s venture capital arm, has launched a new firm and is seeking $200 million for a debut fund. Hwang has been discussing the vehicle with prospective investors, ac

  4. New Launches: Hedge fund Angelo Gordon raising $1.5bn for distressed energy debt, Amundi unveils eight new funds as part of ESG ETF range push, Mezzanine Management gears up for direct lending fund[more]

    Hedge fund Angelo Gordon raising $1.5bn for distressed energy debt From Reuters: Hedge fund Angelo Gordon & Co aims to raise as much as $1.5 billion to buy the debt of distressed oil and gas companies, according to a person familiar with the matter and an investor presentation viewed by R

  5. Tech: Robos fail their first big test, 'Video is fine': Venture capitalists find the benefits in digital due diligence[more]

    Robos fail their first big test From Advisor Perspectives: Robo-advisors faced their first big challenge with the bear market in the first quarter of 2020. They lost, and that is an ominous sign for the future of automated advice. All robos employ a degree of active management. They