The hedge fund industry posted a record estimated outflow of USD148.5bn in December, easily surpassing the previous record estimated at USD54.2bn in October, according to TrimTabs Inves
The hedge fund industry posted a record estimated outflow of USD148.5bn in December, easily surpassing the previous record estimated at USD54.2bn in October, according to TrimTabs Investment Research and BarclayHedge.
Total outflows during the last four months of 2008 are now estimated at USD269.3bn.
TrimTabs and BarclayHedge said hedge fund assets fell to USD998.4bn in December as a result of redemptions and poor performance since December 2007, when they reached a record high of USD1.92trn.
It was the first time industry assets dipped below USD1trn since July 2004, when they were USD976.7bn.
‘The hedge fund industry is clearly under duress,’ says TrimTabs president and chief operating officer Conrad Gann. ‘Approximately two-thirds of industry revenue comes from performance fees and we estimate that 81 per cent of hedge funds were under water last year.
‘As the industry looks forward, managers have half the assets to work with and those remaining assets need to fully recover prior losses before they can earn performance fees.’
BarclayHedge chief executive Sol Waksman adds: ‘With a number of funds putting up redemption gates, we expect the redemption pressure to continue in the first quarter of 2009.’
