Hedge funds kept taking in money at end-2010
Investors poured USD 13 bn of new money into hedge funds in November and likely kept up the pace with more inflows in December, research firms TrimTabs Investment Research and BarclayHedge said on Monday.
January 11, 2011 / 19:28 IST
Investors poured USD 13 bn of new money into hedge funds in November and likely kept up the pace with more inflows in December, research firms TrimTabs Investment Research and BarclayHedge said on Monday.
November's gains in assets mark the fifth straight month of inflows as well as the biggest monthly flows since February when hedge funds took in USD 15 bn. In October funds took in USD 10.4 bn.After a rocky start to 2010, when many prominent fund managers lost money, returns soon improved, helping spark renewed interest in the USD 1.6 trillion industry. June was the only month in 2010 with outflows, the research firms said.The average hedge fund gained about 10% last year, lagging the Standard & Poor's 500 index which gained about 13%.Despite hedge funds' more tepid 2010 returns -- in 2009 they rose 19%-- and the government's growing insider trading probe which frightens some investors, researchers at TrimTabs and BarclayHedge expect demand to stay strong."The year ahead looks bright for the hedge fund industry," BarclayHedge President Sol Waksman said in a statement. "Investors continue to pump money into the space."Several large pension funds, including the state fund in Wisconsin, are expected to make hedge fund allocations this year.Even early estimates for December, traditionally a poor month for money raising, suggest that more money poured in, said Vincent Deluard, executive vice president of research at TrimTabs. Initial tallies put inflows somewhere between USD 5 bn and USD 15 bn for the last month of the year. Official numbers will be released in a few weeks.Hedge funds reported USD 3.6 bn in outflows in December 2009 and USD 120 bn in outflows in December 2008 during the financial crisis.Hedge funds are not required to report returns or assets publicly, and so research reports like these are watched very closely for any types of trends.So-called long-short equity funds that bet on stock price movements took in USD 2.5 bn, leading all categories, the firms reported.Commodity trading advisors (CTAs) posted an outflow of USD 3.9 bn in November, the first in nine months, although the redemption was made by a single large fund, the firms said. Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
