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Forget seeking alpha, how about preserving wealth?

Date: Wednesday, December 3, 2008
Author: Financial Times

The latest Lipper Tass numbers for hedge fund asset flows are out - they reflect a positively dismal third quarter for the industry.

- Net hedge fund industry asset flows in third quarter 2008 reversed the trend of the previous two quarters, declining by US$18.6bn. 

- Overall, the broad hedge fund performance index decline 10.33 per cent in the third quarter
- Global hedge fund assets fell from US$1,800bn on to US$1,630bn as of the end of September 2008, a decline of $170bn
- Positive hedge fund substrategy inflows were experienced by Global Macro, Managed Futures, Equity Market-Neutral and Dedicated Short-Bias.
- All hedge fund substrategies posted negative readings for third quarter 2008

- The largest hedge fund substrategy outflows were experienced by Long/Short Equity, Fixed Income Arbitrage, Multi-Strategies and Emerging Markets

Risk aversion is in full cry, if the last point is any indicator. The decoupling theory of emerging markets also appears to be out of favour, a premise which is supported by EPFR’s latest data on fund flows.

For the week ending November 26, all funds dedicated to emerging markets registered outflows equivalent to 0.24 per cent of total assets; year to date, outflows for EM equity funds has now reached to US$41.2bn.