Investors withdrew $3.78 billion (€3.33 billion) from global hedge funds throughout May, as consolidation pressure in the industry mounted.
Around $77.4 billion has been pulled out of the hedge fund industry over the last nine months – with only one month bucking the negative trend with positive flows, according to eVestment, which compiled the figures.
Up until May this year alone, outflows have hit $25.43 billion, bringing the industry’s assets under management to $3.24 trillion.
“This theme has been persisting for several months, indicating the industry is enduring a consolidation driven primarily by the ability, or inability, of managers to produce returns in-line with investor expectations,” the report states.
“While in the near-term this process is painful, it is a natural process of re-aligning investor demands and fund capabilities in challenging public markets.”
Macro hedge funds were the biggest losers in May, with outflows of $6.56 billion.
After four months of positive flows, the tide turned for emerging markets hedge funds overall, with investors pulling out around $700 million.
On a year-to-date basis, emerging market flows remained positive at over $4 billion.
“Within products gaining new assets in May, China-focused funds were dominant and a focus on equity was evident. While those were the products gaining new assets, there were also several China-focused equity managers who saw redemption pressures in May,” according to eVestment.
Despite overall redemptions, however, many funds have raised new assets so far this year. Multi-strategy hedge funds pulled in nearly $4 billion in May, while event driven hedge funds gained $2.39 billion. The year-to-date total for both fund types stands at $6.56 billion and $7.41 billion respectively.
The report also found that there are funds gaining new assets across every segment in the hedge fund industry – even those with the most negative flows.
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