The hedge fund industry experienced aggregate outflows of US$35.3 billion (€31 billion) during 2018: the second highest the industry has experienced since 2009.
According to the latest Hedge Fund Industry Asset Flow report, published by eVestment, the industry experienced net redemptions in each of the last four months of 2018 - the longest period of consecutive monthly outflows that the industry has witnessed since 2011.
Overall industry assets contracted by US$87.4 billion to US$3.189 trillion year-on-year, the largest decline that the industry has witnessed since 2008.
During December, investors removed an estimated US19.64 billion from hedge funds. Redemptions from directional equity exposure accelerated sharply, with net outflows from long/short equity funds, at US$8.88 billion, the largest for the segment since 2009.
Multi-strategy funds also disappointed, suffering net outflows of US$4.93 billion in December and US$17.93 billion year-on-year.
Macro strategies provided some positive news, with macro managers delivering aggregate performance gains in 2018 and experiencing investment inflows of US$3.44 billion during December. This brought flows firmly into positive territory (US$6.74 billion) for macro managers over the year.
Commenting on the data, the report concludes that 2018 provides a reminder to investors that “the industry is not necessarily full of exceptional managers”.
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