Hedge Funds Redeem $15.2 Billion in January

March 6, 2012 Debbie Jacobs In the News

Hedge funds have redeemed $15.2 billion this past January, according to Barclay Hedge and TrimTabs Investment Research.

“Hedge funds managed a 3.1% return in January after posting losses in seven out of the last eight months of 2011,” said BarclayHedge founder and president Sol Waksman. The S&P 500 Index exceeded the hedge fund industry throughout 2011, and now recorded returns of 4.2% in January.

“January marked the biggest monthly outflow since July 2009, when hedge funds redeemed $17.7 billion,” TrimTabs analyst Leon Mirochnik said. “The hedge fund industry has experienced net outflows in four out of the last five months.

Only a small number of investment strategies have seen net inflows since the fourth quarter of last year. These include fixed income, Multi Strategy funds, and Merger Arbitrage hedge funds.

“It seems fund-of-funds managers might have a hard time explaining their layers of fees to their clients, as funds-of-funds have underperformed hedge funds by 200 bps over the past year,” Mirochnik said. “Multi Strategy hedge funds pulled in $2.6 billion in January, the heaviest inflow of the strategies we track. Investors seem to be piling into strategies that can benefit from geopolitical uncertainty around the world.”

Barclay Hedge, Hedge Fund Industry, Hedge Funds, Leon Mirochnik, S&P 500 Index,

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