Hedge Fund Investors are Rushing for the Exits in 2019
Compared to 2018, investors have already pulled $ 20 billion more out of hedge funds in the first seven months of this year
Hedge fund investors are walking away in droves.
In all of 2018, investors had withdrawn $ 37.2 billion from hedge funds. However, in the current year investor outflows already aggregate $ 55.9 billion, including $ 8.4 billion in July itself.
The trend could accelerate in the months ahead.
Some funds escaped withdrawals
Data from eVestment showed that about 37% of hedge funds were spared the redemption bloodbath, and instead reported net inflows during the period to July. Of these, the best performers were the category ‘event-driven,’ which raked in $10.3 billion.
The category singled out for the most withdrawal punishment was ‘long-short,’ which lost $25.5 billion in investor capital.
This year’s redemptions are therefore the worst since those witnessed in 2016.
Hedge fund investors fret over fees and weak performance
The hedge fund industry is reeling from the rejection by investors who are fed up with their high fees. Under pressure from investors, funds have long-since junked the time-honored fee structure of two-and-twenty. Those hedge funds unable to cope have shut shop. As a result, in each of the last three years, fund closures have exceeded the number of new fund launches.
Their lackluster performance in 2018 is another factor.
“Many investors still may be stinging from the overall industry performance of -5.08% in 2018, causing the industry to suffer from asset outflows based on decisions made by investors months ago following that dismal year,” said Evestment.
Latest Alternative Investment News
Lloyds Banking Group (LON: LLOY), Britain’s biggest mortgage provider, will acquire a minority stake in loyalty app Bink, according to a report by Sky News for an undisclosed amount that…
An iconic property in Bel Air, Los Angeles, designed by internationally acclaimed English architect John Pawson changed hands last month for $133 million and the buyer was Coinbase (NASDAQ: COIN)…
VegTech Invest advisory has launched the VegTech Plant-based Innovation & Climate ETF (Ticker: EATV), its first financial product. The ETF offers exposure to publicly traded companies actively innovating with plants…
Chinese AI company Parametrix.ai has raised $100 million in a Series B round led by Sequoia China and joined by existing investors 5Y Capital and Gaorong Capital. Though the valuation…