Skittish Investors Drive Hedge Fund Redemptions to $29.1 Billion in November

FAIRFIELD, Iowa. January 29, 2019 – Hedge fund redemptions picked up speed in November, falling short of September’s five-year high but outpacing October’s level, according to the Barclay Fund Flow Indicator, published by BarclayHedge, a division of Backstop Solutions.

The Barclay Fund Flow Indicator is a comprehensive monthly report tracking the health of the alternative investments industry.

Data from the nearly 6,000 funds included in the BarclayHedge database showed hedge fund investors worldwide (excluding CTAs) redeemed $29.1 billion, 1.0% of assets, in November. It was the third straight month of redemptions, and, while November redemptions fell short of September’s five-year high of $39.1 billion, they marked a significant increase from October’s $20.7 billion.

While investors continued to react to equity market volatility and global economic uncertainties, based on new additions to the BarclayHedge database during November, hedge fund industry assets did increase to nearly $3.09 trillion in November, up from $2.97 trillion in October.

Among hedge fund sectors, Sector Specific funds led the pack in November in 12-month inflows with more than $10.6 billion, 7.4% of assets. Balanced (Stocks & Bonds) had the largest 12-month redemptions at nearly $23.2 billion, 11.1% of assets.

By region, only hedge funds in Asia, excluding China and Japan, experienced a hedge fund inflow in November. Those funds reported inflows of $40.9 million in November, 0.1% of assets. Hedge funds in Continental Europe saw outflows of nearly $14.6 billion in November, 2.1% of assets, while U.K. and their offshore island funds experienced $13.0 billion in redemptions, 2.3% of assets, with investors in both areas wary of a “no-deal Brexit,” among other concerns.

The outflow trend continued for Latin America hedge funds with $129.7 million in redemptions, 1.2% of assets in November with total year-to-date redemptions now reaching 42.7% for Latin America funds.

In the managed futures area, Commodity Trading Advisor (CTA) fund redemptions pulled back significantly from October’s 22-month high of $3.2 billion, but still stood at more than $2.0 billion, 0.6% of assets. For the 12 months ending in November, though, CTA funds had still added $9.1 billion, 2.6% of assets, driven by strong inflows in January and February.

The monthly Barclay Fund Flow Indicator, published by BarclayHedge, can be found here.

About Backstop Solutions

Backstop’s mission is to help the institutional investment industry use time to its fullest potential. We develop technology to simplify and streamline otherwise time-consuming tasks and processes, enabling our clients to quickly and easily access, share, and manage the knowledge that’s critical to their day-to-day business success. Backstop provides its industry-leading cloud-based productivity suite to investment consultants, pensions, funds of funds, family offices, endowments, foundations, private equity, hedge funds, and real estate investment firms.

BarclayHedge, a division of Backstop, currently maintains data on more than 6,900 hedge funds, funds of funds, and CTAs. Institutional investors, brokerage firms, and private banks worldwide utilize BarclayHedge indices as performance benchmarks for the hedge fund and managed futures industries.

MEDIA CONTACT:

Sol Waksman

BarclayHedge division of Backstop Solutions Group

(641) 472-3456

swaksman@barclayhedge.com