Hedge fund redemptions fall as investors take refuge in turmoil

CONCERN over the Eurozone debt crisis means investors have cut by nearly four-fifths the amount of money they are pulling from hedge funds.

Gross fund outflows, as measured by the GlobeOp Capital Movement Index, which tracks monthly net subscriptions to and redemptions from hedge funds running around $170bn (£106.5bn) of assets, dropped to 0.72 per cent compared with 3.25 per cent a month earlier.

It represents the lowest volume of November exits seen since index records began in 2006, as demand for risk management strategies rallied amid fears over Europe’s debt crisis.

The sharp fall in exits resulted in the third largest net monthly inflows seen this year in November, just 36 basis points short of the 2.41 per cent high recorded in May.

Overall the index for November 2011 stands at 139.50 points, an increase of 2.05 points over October. It has advanced 14.35 points over the past year.

Some hedge fund managers led a rebound in the performance of European hedgies in October, but many remain in negative return territory.