Hedge funds posted an estimated inflow of USD18.7bn in November, more than double the inflow of USD8.2bn in October, according to TrimTabs Investment Research and BarclayHedge.
The inflow in November was the largest since May 2008.
“Flows into hedge funds are back to pre-crisis levels,” says Sol Waksman, chief executive of BarclayHedge. “Nevertheless, the inflow of USD54bn in the latest four months reversed only a small portion of the redemptions of USD402bn from September 2008 through July 2009.”
In addition, funds of hedge funds took in USD4.9bn in November, their first significant inflow since March 2008.
“The liquidity constraints exposed in the 2008 meltdown forced funds of funds to reduce risk last year, and they missed most of the rally,” says Vincent Deluard, global equity strategist at TrimTabs. “They will be under pressure to perform strongly to justify their lofty fees.”
In a research note, TrimTabs and BarclayHedge also calculated that hedge fund launches fell to a record low of 1.8 per cent of hedge funds’ assets in 2009.
The drop occurred because fewer funds were launched (10.4 per cent of hedge funds count in 2009 versus 13.9 per cent in 2008) and funds were launched with fewer assets (average assets of USD452m in 2009 versus USD1.4bn in 2008).
