- Advertisement -
- Advertisement -

Related

Investors Redeem USD 22 Billion from Hedge Funds in Q4

Industry Report

- Advertisement -

Stockholm (HedgeNordic) – Investors redeemed an estimated $22 billion (0.7 percent of industry capital) in the fourth quarter of 2018 according to the HFR Global Hedge Fund Industry Report. This marks the highest quarterly outflow since the third quarter of 2016. Most of the outflows were concentrated to equity hedge strategies while event driven saw inflows.

The fourth quarter net asset outflow brings the full-year capital outflow to $34 billion and decreases total hedge fund capital to $3.11 trillion, down from the prior quarter record of $3.24 trillion, the HFR report states.

Some hedge funds were hit harder than others. According to HFR, about two dozen hedge funds experienced outflows greater than $500 million during the quarter.

Most of the capital was pulled from equity hedge funds with approximately $16.8 billion exiting that strategy. On average, equity hedge funds’ performance fell 8.3% during the fourth quarter, bringing their average full-year performance to -6.9%, according to the HFRI Equity Hedge (Total) Index.

The pain of some hedge funds was another’s gain. About one dozen hedge funds saw net inflows of greater than $500 million during that period. Event-driven funds, particularly those that focus on distressed/restructuring, saw inflows. Event-driven funds, in aggregate, fell 2.35% in 2018.

Hedge fund outflows in 4Q were driven by several factors, most notably investor reaction to steep losses in traditional asset investments and the sharp spike in equity market volatility leading to redemptions.

“Hedge fund outflows in 4Q were driven by several factors, most notably investor reaction to steep losses in traditional asset investments and the sharp spike in equity market volatility leading to redemptions. However, outflows also included several large fund closures from early 4Q (pre-equity market declines in Oct & Dec), including instances of family office conversions and orderly, manager-initiated returns of investor capital, with all of these representing a stark contrast from the panic-driven redemption from the 2008 Financial Crisis,” stated Kenneth J. Heinz, President of HFR.

HFR follows nearly 7,000 hedge funds. Some estimates put the total number of hedge funds at around 10,000 to 15,000.

Picture (c): Rrraum—shutterstock

Subscribe to HedgeBrev, HedgeNordic’s weekly newsletter, and never miss the latest news!

Our newsletter is sent once a week, every Friday.

HedgeNordic Editorial Team
HedgeNordic Editorial Team
This article was written, or published, by the HedgeNordic editorial team.

Latest Articles

Rising Adoption of Quantitative Investment Strategies Among Nordic Investors

From a high-level perspective, there is a clear trend of increasing adoption of quantitative investment strategies (QIS) among Nordic institutional investors, either through the...

EU Plans Stress Test for Hedge Funds and Non-Bank Firms

European regulators are planning a stress test to identify vulnerabilities beyond the traditional banking sector, focusing on less regulated entities such as hedge funds,...

ALCUR Fonder Continues Hiring Spree

Following two earlier additions this year, ALCUR Fonder continues to expand its portfolio management team at a notable pace. The Stockholm-based hedge fund boutique...

Nordic Private Markets Modernize with Data-Centric Trade Lifecycle Automation

By Anders Stengaard Jensen at Indus Valley Partner: In recent years, asset managers in Nordic countries have accelerated efforts to modernize trade operations, particularly...

Norwegian Hedge Fund Industry Sees Major Boost with New Launch

The Swedish and Danish hedge fund industries remain closely matched in size, with Denmark recently edging ahead of Sweden. While still less than half...

Atlant Funds Hold Up in May Despite Mistimed Market Call

Macroeconomic and market forecasts are notoriously difficult, even for experienced hedge fund managers. What matters more than being right, however, is ensuring that incorrect...

Allocator Interviews

In-Depth: High Yield

Voices

Request for Proposal

- Advertisement -
HedgeNordic
Privacy Overview

This website uses cookies so that we can provide you with the best user experience possible. Cookie information is stored in your browser and performs functions such as recognising you when you return to our website and helping our team to understand which sections of the website you find most interesting and useful.