Hedge funds see highest redemption in five years

Investors based in continental Europe pulled $2.8 billion (€2.45 billion) out of hedge funds, reflecting a wider trend for redemptions in September.

In total, investors globally pulled $39.1 billion out of hedge funds during the month – the highest level in more than five years, according to estimates.

BarclayHedge estimated the outflows based on over 5,000 funds (excluding commodity-trading advisers) and said redemptions amounted to 1.3% of the industry’s assets. The previous month had seen inflows of $21.5 billion.

“Hedge fund investors had cause for scepticism with rising interest rates, increasing US deficits in spite of a booming economy, and a slowdown in China negatively impacting emerging economies worldwide,” said Sol Waksman, founder and president of BarclayHedge.

Year-to-date hedge fund inflows are $2.7 billion. By contrast, the industry raked in $94.8 billion in the first nine months of 2017.

Sector-specific funds had the biggest 12-month inflows at $15.8 billion, while macro funds had the largest 12-month redemptions at $12.1 billion.

“Except for a trickle of inflows to Canadian hedge funds, all the global fund categories we track lost assets in September,” Waksman said.

Weak demand for hedge funds contrasted with strong demand for equities in September, BarclayHedge said, when US stock indices hit record heights.

©2018 funds europe

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