Uptick in hedge fund flows amid bad year

Hedge fundThe hedge fund industry had net inflows of $5.1 billion (€4 billion) in August, an improvement from $9.2 billion of net outflows the prior month, said research.

But the uptick does not mask a bad year for the industry, which has suffered $13.2 billion in net redemptions so far in 2012, said the report from BarclayHedge and TrimTabs Investment Research.

Total assets held by the 2,999 funds in the firms' database were $1.7 trillion in August, nearly 30% less than their June 2008 peak of $2.4 trillion.

It is perhaps no surprise that investors have withdrawn money from hedge funds this year. The funds in the database returned an average of 4.2% in the first eight months of the year, while the S&P 500 returned more than 10%.

“The inflows we saw in August could not mask the profound troubles facing the hedge fund industry this year,” said Sol Waksman, founder and president of BarclayHedge.

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