Hedge funds assets slide in Q2

Date: Friday, August 19, 2005
Author: Advisor.ca

Global hedge fund assets fell 2% in the second quarter, to $1.06 trillion from $1.08 trillion, the Barclay Group reports. Managed futures assets were flat, at $121 billion.

In spite of the second quarter decline, hedge fund assets have grown $17 billion, or 1.6%, since the beginning of the year. Fund of funds assets maintained their strength during Q2, climbing 11% to $564 billion.

"We're seeing redemptions from single manager funds even as money continues to flow into funds of funds," says Sol Waksman, president of the Barclay Group. "The data supports the anecdotal evidence that high net worth investors, who typically have shorter-term time horizons and higher absolute return targets, have been selling while risk-averse institutional investors with longer-term time horizons have been buying."

Seven of the 14 hedge fund sectors monitored by Barclay saw money under management fall during Q2, while five sectors rose, paced by emerging markets, and two were unchanged.