Tuesday 21 April 2009

‘Fund of funds’ redemptions soar in Q1

Hedge funds may be faring better now than they were in the fourth quarter of 2008, but it seems the general investor backlash against high fees and risky exposure continues to thwart the ‘fund of funds’ part of the industry (what with their double fees etc.)

In its latest findings, Hedge Fund Research, an industry data provider, estimates investors redeemed up to $104bn from hedge funds in the first quarter, versus the record $152bn withdrawn from the industry in the fourth quarter of 2008. The first-quarter figure makes up some 7.4 per cent of industry assets.

However, here’s the clincher: withdrawals from ‘fund of hedge funds’ specifically totalled $85bn in the first quarter — that far exceeds the fourth quarter 2008 redemption of $50bn and accounts for the majority of capital withdrawn from the hedge fund industry overall.

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