News Digest: Hedge funds facing higher instances of redemptions
December 16, 2022
Hedge funds in North America are witnessing higher levels of redemptions from investors due to their allocations to alternatives being above targets. Average investor allocation to hedge funds stands at 15.2%, which is more than three percentage points over the average target allocation of 11.9%, says a Preqin report.
However, investors in the Asia-Pacific region allocated only 11.2% of their assets to hedge funds, which is marginally higher than the target allocation of 9.4%, while in Europe, the current allocation levels to hedge funds remain below the targets.
A report from eVestment says net outflow from hedge funds reached $14 billion in October, the largest for the month since 2016. It was also the fifth successive month where net flows into the asset class were in the negative. The report said, long-short equity, macro and credit strategies drove these net outflows. Hedge funds lost an average 7.6% till end-October 2022, while the S&P 500 lost 17.1% during the same period.