Thousands of investors have pulled their money out of hedge funds over the last year. But many of those who kept faith in their managers are suddenly being rewarded.
This is partly down to the improvement in market conditions in recent weeks. But it also reflects an exodus of hedge funds from the business in the second half of last year. This has resulted in a less crowded market, with far fewer funds chasing investment opportunities.
Investors pulled 20 per cent of their money from hedge funds in 2008 while industry assets shrank by almost $800bn to $1,200bn, according to estimates by the Hennessee Group, a New York hedge fund consultant, as the industry produced its worst results ever.
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