Hedge Fund Assets Set to Fall Another 20% This Year
After dropping 30 percent in 2008, hedge funds’ assets are likely to fall by another 20 percent in 2009, according to International Financial Services London (IFSL). Its annual Hedge Funds report indicates that in the first two months of 2009 hedge fund assets fell by 9 percent, largely due to redemptions. The surge in withdrawals at the start of the year came as restrictions on redemptions in some hedge funds, particularly in the US, were lifted.
After a decade of growth averaging around 20 percent a year, assets under management of the global hedge fund industry fell by nearly 30 percent in 2008 to $1,500bn.
The decline, the biggest on record, was due in equal measure to negative performance and withdrawals.
The average hedge fund lost 15.7 percent in 2008, the worst performance on record. Nearly three quarters of hedge funds, and 85 percent of funds of hedge funds lost money during the year.
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