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Hedge funds outflows extend to three months

Hedge funds outflows continueOutflows from hedge funds continued for a third consecutive month in August as global economic and political concerns offset early summer gains made in the equity market.

The hedge fund industry reported $11.3 billion (€10.1 billion) of net redemptions throughout the month – up from $8.1 billion in July, according to a report by alternative investment data and indices provider BarclayHedge.

August’s outflows represented 0.4% of assets under management. Coupled with a $10.3 billion monthly trading loss, hedge fund industry assets stood at more than $3.08 trillion, the firm said.

Despite strong performance in US equity markets in June and July, concerns over economic and political news in China, the Eurozone and the UK took their toll.

Hedge fund redemptions in the UK and Europe were largely driven by the global outflow trend.

“With continued fears of the UK crashing out of the European Union with a no-deal Brexit hammering the pound and threatening the UK economy, investors pulled $14.4 billion from hedge funds in the UK and its offshore islands in August,” BarclayHedge said.

In continental Europe, the industry suffered nearly $11.8 billion of outflows due to reports of shrinking manufacturing output in the Eurozone shaping investor sentiment.

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