HFR: Hedge fund redemptions hit record

Hedge funds experienced record net redemptions of $155 billion in 2008, which when combined with a performance decline of 18.3% for the HFRI Fund Weighted Composite index for the year, dropped total industry assets 25% to $1.4 trillion as of Dec. 31, according to Hedge Fund Research data released today. HFR researchers noted that net redemptions in the fourth quarter alone were $152 billion. In fact, HFR data showed that total assets under management by Dec. 31 were down by $525 billion or 27% less than the $1.9 trillion industry peak it reported as of June 30, 2008, through a combination of net outflows and negative performance. Last year was only the second in which hedge funds experienced net outflows since HFR started tracking hedge funds in 1990, according to the firm’s latest report. The last year hedge fund asset growth was negative was in 1994, by $1 billion.