Hedge Funds Outflows May

Hedge Fund Investors Withdraw $3.5 Billion in April

Hedge fund investors may have anticipated last month's poor returns, as they withdrew money from hedge funds.  Hedge funds lost an average 2.7% in May and in April investors withdrew $3.5 billion from the industry.

Investors withdrew $3.5 billion from hedge funds in April, according to TrimTabs Investment Research and BarclayHedge estimates.

Industry assets stood at $1.65 trillion globally, the highest level in 18 months, the companies said today in a statement. Hedge funds rose 1.2 percent in April, as measured by the Credit Suisse Tremont Index, compared with a 1.5 percent gain for the Standard & Poor’s 500 Index of the largest U.S. companies.

“Proposed financial regulation in the U.S. and Europe -- some government folks aim to restrict the ability of banks to invest in hedge funds -- might help explain domestic flow weakness,” the firms said. Hedge funds in Asia and Canada received more money than those in the U.S. and Europe over the past 12 months, they said.

Investors pulled a net $7.3 billion from equity long-short funds, which bet on rising and falling stock prices, according to TrimTabs and BarclayHedge. 

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