Tags: hedge | funds | clobbered

Hedge Funds Get Clobbered in October

Thursday, 20 Nov 2008 04:03 PM

Hedge funds saw $40 billion in investor cash leave their funds in October, raising the total outflows for the year to $155 billion, reports Hedge Fund Research (HFR).

Assets under management in hedge funds fell to $1.56 trillion at the end of the month, their lowest level in two years as doubtful investors pulled out en masse. At least part of the pressure on the overall stock market in recent weeks has been forced selling by hedge funds to cover such redemptions.

The research company’s index of hedge funds slipped nearly 6 percent in October and has fallen by more than 16 percent this year. It has lost 12 percent since just Sept.1.

The biggest losers were “fund of funds” hedge funds which try to cherry pick the best returns by investing across several hedge funds at once. They lost more than $22 billion. The performance of funds of funds fell by 18.5 percent, according to Hedge Fund Research.

Ken Heinz, president of HFR, said the industry's current performance is the largest “drawdown” ever.

“The industry has now registered five consecutive months of losses, another inauspicious first. Consolidation is likely to continue into 2009 as investors across all asset classes indiscriminately liquidate assets to move portfolios into cash holdings,” Heinz says.

HFR estimates there were 10,000 hedge funds at the end of October.

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Hedge funds saw $40 billion in investor cash leave their funds in October, raising the total outflows for the year to $155 billion, reports Hedge Fund Research (HFR).Assets under management in hedge funds fell to $1.56 trillion at the end of the month, their lowest level in...
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2008-03-20
Thursday, 20 Nov 2008 04:03 PM
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