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In association with Hedge Fund Intelligence |
Assets in global hedge funds dropped sharply during 2008 to finish the year at just over $1.8 trillion, according to HedgeFund Intelligence’s global database. It reveals that the fall in net assets occurred almost entirely in the second half of the year, with a drop of 32.3% from $2.697 trillion at the end of June to $1.826 trillion at the end of December. Assets stood at $2.646 trillion at the beginning of 2008. The decline in assets under management flows from a mixture of negative performance and net redemptions from the industry, as the tumultuous conditions wrought by the global economic crisis had a serious impact on hedge funds in 2008. The mean average returns from hedge funds were close to minus 15% in 2008 – though with huge dispersion in the returns from individual funds, including a significant minority that were up for the year.
As a number of funds have imposed gate provisions or suspended redemptions, assets could fall a further 20% or more from end-2008 levels before the decline is likely to reach a bottom – which we expect to occur some time this year.