More investors are redeeming from hedge funds, according to an eVestment report released on Wednesday.
Investors pulled about $10.3 billion from hedge funds last month, bringing the net total amount that investors have yanked this year to $60 billion, the report said.
What’s more, last quarter’s redemptions were the largest since the first quarter of 2009.
To be fair, the cumulative redemptions in the past year – $87 billion – are less than half the amount in that crisis quarter. And the redemptions as a whole are just a small mark on the industry, which is considered to manage about $3 trillion.
But the redemptions also signal a worrying trend, the report said:
“Public financial markets are generally not operating as if we are in the midst of a crisis period, which means the current flow trends are more emblematic of an industry in crisis … Even the industry’s best performing segments, distressed and event driven, continue to be beset by redemptions.”
Hedge funds have faced a rough patch for some time, criticized for their relatively high fees and underwhelming performance. Managers have blamed poor returns on several market issues, while some managers are advocating would-be managers to steer clear of the business altogether.