Hedge funds attracting cash in 2012 rebound

Date: Friday, April 13, 2012
Author: Reuters

Investors put more cash into hedge funds over the past month, data from hedge fund administrator GlobeOp shows, encouraged by a rebound in financial markets and better fund performance this year.

Net inflows into hedge funds, as measured by the GlobeOp Capital Movement Index, which tracks monthly net subscriptions to and redemptions from hedge funds managing around $187 billion, were 0.35 percent of that total during the month to April 1.

This was well below the previous month's 2.02 percent inflow, but the rate may have been distorted by portfolio adjustments for the end of the quarter.

Inflows were still better than the 0.02 percent net withdrawal seen a year ago and flows at the end of the second, third or fourth quarters last year.

Hedge funds lost 5.2 percent last year, according to Hedge Fund Research, as they struggled to cope with volatile markets amidst the deepening euro zone crisis.

However, in the first three months of the year the average hedge fund is up 4.9 percent, with some big-name managers recording double-digit gains.

Crispin Odey's Odey European fund gained 21.1 percent and Johnny de la Hey's Tosca fund rose 13.7 percent to mid-March, while Michael Hintze's $1.4 billion CQS Directional Opportunities fund was up 13.9 percent to end-February.

Markets have been boosted by the European Central Bank's 1 trillion euro ($1.31 trillion) cash injection - the so-called Long Term Refinancing Operations - designed to avoid another credit crunch.