- Advertisement -
- Advertisement -

Related

Largest Quarterly Outflows Since 2009

Latest Report

- Advertisement -

Stockholm (HedgeNordic) – Hedge fund industry assets dropped below $3 trillion for the first time since the third quarter of 2016 after investors pulled a net $33 billion from hedge funds in the first quarter. This amounts to about one percent of industry assets and represents the largest quarterly outflow since investors redeemed $42 billion in the second quarter of 2009, according to Hedge Fund Research.

Hedge fund industry assets declined by $366 billion during the first quarter to $2.96 trillion from the prior quarter’s record of $3.32 trillion. Performance-based asset losses amounted to $333 billion in the first quarter, reflecting a broad-based sell-off in equity markets and widening credit spreads. The net outflow of $33 billion is the fourth-largest on record, according to Hedge Fund Research. The three largest quarterly outflows occurred from the fourth quarter of 2008 through the second quarter of 2009.

“Investors reacted to the unprecedented surge in volatility and uncertainty driven by the global coronavirus pandemic with a historic collapse in investor risk tolerance and the largest capital redemption from the hedge fund industry since post-Financial Crisis,” stated Kenneth J. Heinz, President of HFR, in the company’s quarterly report. “While volatility and market dynamics remain fluid through early 2Q, dislocations created by indiscriminate selling from traditional asset management have created significant opportunities for specialized long/short funds, which are likely to benefit both forward-looking funds and institutional investors in coming quarters,” he added.

Investors withdrew an estimated $22 billion from macro strategies in the first quarter despite the group leading industry performance. Total capital invested in macro strategies decreased to $561 billion. In this strategy group, quantitative trend-following CTA strategies suffered an estimated outflow of $19 billion, partially offset by investor allocations of $3.8 billion to fundamental macro discretionary strategies.

According to Hedge Fund Research, outflows were concentrated in the industry’s largest firms, with an estimated $20.6 billion redeemed from firms managing more than $5 billion. Firms managing between $1 billion and $5 billion in assets under management experienced a net outflow of $11 billion. Investors redeemed $1.6 billion from firms managing less than $1 billion. Hedge funds lost less money than the broader market during the first quarter of 2020. The HFRI Fund Weighted Composite Index fell by 9.4 percent during the quarter, whereas the S&P 500 fell by almost 20 percent.

Photo by Markus Winkler on Unsplash

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

Our newsletter is sent once a week, every Friday.

Eugeniu Guzun
Eugeniu Guzun
Eugeniu Guzun serves as a data analyst responsible for maintaining and gatekeeping the Nordic Hedge Index, and as a journalist covering the Nordic hedge fund industry for HedgeNordic. Eugeniu completed his Master’s degree at the Stockholm School of Economics in 2018. Write to Eugeniu Guzun at eugene@hedgenordic.com

Latest Articles

From Beef to Bitcoin: August’s Wild CTA Ride

In August 2025, the CTA sub-index of the Nordic Hedge Index edged lower after two positive months, reflecting mixed performance among managers. Strong gains...

Lauri Ehanti to Leave Aalto University Endowment After 14 Years

Lauri Ehanti is leaving Aalto University’s endowment fund after 14 years in various roles, most recently as Head of Investments. His responsibilities will be...

Othania’s All-In-One Fund Celebrates Five Years

Danish fund boutique Othania is celebrating the five-year anniversary of Othania Balanceret Makro, its all-in-one fund blending equity, bond, and alternatives exposure through Exchange...

Atlant Fonder Crosses SEK 10 Billion Milestone

Strong performance and steady inflows have propelled alternative fund boutique Atlant Fonder past the SEK 10 billion milestone in assets under management. Its flagship...

Nordea PM Joins Lancelot Global as Co-Manager

Lancelot Global, a long-only equity fund with flexible net exposure ranging from 60 to 120 percent, has strengthened its portfolio management team with the...

Quirky Questions – or, A Peoples Business

If asset management were only about numbers, we could all go home and let the calculators get on with it. But calculators are dull...

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.