Investors exit hedge funds at fastest rate in four years

Date: Tuesday, January 14, 2014
Author: Tommy Wilkes, Reuters

Investors pulled out money from hedge funds at the fastest rate for more than four years in December, following a year in which many managers' performance disappointed, new data showed on Monday.

The SS&C GlobeOp Capital Movement Index, which calculates monthly hedge fund subscriptions less redemptions, measured minus 3.56 percent for December, the biggest negative reading since September 2009.

While the end of the year period usually sees a pick-up in redemptions as investors look to move money around their portfolio ahead of the new year, December's reading is notably high. In the same month last year the index measured minus 2.61 percent.

Hedge funds made their investors an average of 12.32 percent last year following a 0.72 percent gain in December, the SS&C GlobeOp Hedge Fund Performance Index separately showed on Monday, but this compares poorly with the rise of most stock indexes, the performance of which investors can access cheaply.

The MSCI World Index rose around 24 percent last year, beating all but a few top performing funds.

Across 2013 as a whole, the Capital Movement Index advanced 0.16 percent, meaning inflows into the industry only marginally outweighed outflows.