Here was the story from Reuters this past Friday, from Laurence Fletcher:
Client demands to pull money out of hedge funds rose to their highest level in more than three years in December, at the end of a year that has left many investors disappointed with performance.
Hedge fund administrator SS&C GlobeOp’s forward redemption indicator, a monthly snapshot of clients giving notice to withdraw their cash as a percentage of assets under administration, measured 6.19 percent in December.
This was the highest level since September 2009 and almost double the level just two months ago. A year ago, the index measured 4.58 percent.
After a tough time during the credit crisis, hedge funds have managed to avoid a third year of losses in five in 2012, but their gains have lagged stock market indexes.
Do these hedge fund withdrawals amount to a bullish contrarian indicator, being that sentiment is so dour? Or, is this simply a reflection of a watered-down hedge fund industry that needs to shrink, courtesy of market forces?
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