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Skittish investors drive hedge fund redemptions to USD29.1bn in November

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Hedge fund redemptions picked up speed in November, falling short of September’s five-year high but outpacing October’s level, according to the Barclay Fund Flow Indicator, published by BarclayHedge, a division of Backstop Solutions.

The Barclay Fund Flow Indicator is a comprehensive monthly report tracking the health of the alternative investments industry.
Data from the nearly 6,000 funds included in the BarclayHedge database showed hedge fund investors worldwide (excluding CTAs) redeemed USD29.1 billion, 1.0 per cent of assets, in November. It was the third straight month of redemptions, and, while November redemptions fell short of September’s five-year high of USD39.1 billion, they marked a significant increase from October’s USD20.7 billion.
While investors continued to react to equity market volatility and global economic uncertainties, based on new additions to the BarclayHedge database during November, hedge fund industry assets did increase to nearly USD3.09 trillion in November, up from USD2.97 trillion in October.
Among hedge fund sectors, Sector Specific funds led the pack in November in 12-month inflows with more than USD10.6 billion, 7.4 per cent of assets. Balanced (Stocks & Bonds) had the largest 12-month redemptions at nearly USD23.2 billion, 11.1 per cent of assets.
By region, only hedge funds in Asia, excluding China and Japan, experienced a hedge fund inflow in November. Those funds reported inflows of USD40.9 million in November, 0.1 per cent of assets. Hedge funds in Continental Europe saw outflows of nearly USD14.6 billion in November, 2.1 per cent of assets, while U.K. and their offshore island funds experienced USD13.0 billion in redemptions, 2.3 per cent of assets, with investors in both areas wary of a “no-deal Brexit,” among other concerns.
The outflow trend continued for Latin America hedge funds with USD129.7 million in redemptions, 1.2 per cent of assets in November with total year-to-date redemptions now reaching 42.7 per cent for Latin America funds.
In the managed futures area, Commodity Trading Advisor (CTA) fund redemptions pulled back significantly from October’s 22-month high of USD3.2 billion, but still stood at more than USD2.0 billion, 0.6 per cent of assets. For the 12 months ending in November, though, CTA funds had still added USD9.1 billion, 2.6 per cent of assets, driven by strong inflows in January and February.

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