Hedge Fund Flows

Hedge Fund Flows Reach Pre-Crisis Level

In the last few months we've been gathering evidence that the hedge fund industry has really recovered and today's news is a milestone in a great year for hedge funds. Clients of hedge funds are back to pre-crisis money flows on both a gross and net basis. Hedge funds have had to make up for steep losses the last years and have struggled to win back confidence from their investors but a solid year of returns will certainly help in regaining that trust. The information comes from GlobeOp Financial Services, the firm's CEO Hans Hufschmid commented "The redemption pipeline looks like it looked prior to all the troubles ... Net subscriptions are also back to historical averages."

"Performance has been very good for our clients, who have made money every month since last December. That's translated into improved subscriptions," said Hufschmid, whose firm offers administration, risk reporting and technology to funds with a total of $106 billion under management.

His comments on a recovery in hedge fund money flows come after the industry posted record losses of 19 percent in 2008, and after some funds infuriated clients by locking up their money just when liquidity was most needed.

However, hedge funds have enjoyed a bumper year in 2009 as asset prices rebounded, with the average fund up 17.5 percent to November, according to Credit Suisse/Tremont.

Data from Hedge Fund Research shows that after withdrawing a net $330 billion from the industry in the year to June, investors gradually returned in the third quarter with a net inflow of $1.1 billion. Source

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