Hedge fund outflows suggest the industry is in “crisis” after nearly $60 billion (€55 billion) was redeemed in the year to the end of September.
The $59.9 billion in redemptions indicate a “potential crisis situation for the industry”, said Peter Laurelli, vice president of research at eVestment.
$29.2 billion was redeemed in the third quarter (Q3) and $10.3 billion of that was redeemed in September alone.
“The level of industry redemptions in Q3 were the largest of this current four-quarter-long outflow trend, and largest since Q1 2009,” said Laurelli in an eVestment hedge fund flows report.
Although he noted that the cumulative outflow in the four quarters of $86.7 billion is less than half the level of redemptions in just Q1 2009, “the difference, however, is that overall financial markets are clearly not operating in crisis mode this time”.
Total industry assets still stand above $3 trillion – a “psychologically important” marker – but only just, at $3.026 trillion.
As with traditional funds, emerging markets hedge funds offer “a bit of good news” for the industry, with $1.09 billion of inflows in September, but they are still negative for the year
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