I wonder why investors are pulling funds out of the hedgies? Don’t they enjoy their brand of underperformance and the access to financial stars who regularly frequent CNBC and who are called ‘asshole greed goblins’ at iBankCoin?
Amidst a sundry of reports of pension funds opting out of hedge funds, it should come as no surprise that the number of funds in business is scheduled to decline, rightfully so.
Research firm Hedge Fund Research (HFR), in a monthly report released on Friday, counted a total of 10,007 hedge funds worldwide in July.
“Based on recent HF (hedge fund) performance and the increased challenges to launching an HF (hedge fund), we estimate that there would be a net decrease in the number of funds by YE (year end) 2016,” the Barclays report said.
Barclays’ calculations were based on a survey this year of 340 investors who had allocated $900 billion to hedge funds, making up roughly 30 percent of the industry.
From 2010 to 2015, the number of funds grew 2 to 3 percent each year. But Barclays found that 61 percent of those surveyed felt hedge funds did not meet their expectations.
Investors overwhelmingly blamed the industry’s large size for current tepid returns, with 74 percent of those surveyed saying too many managers were chasing a limited number of ideas.
No word on whether or not Bill ‘Montauk’ Ackman will be on the list, finally moving over to a family office structure.
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