News Digest: Hedge funds suffer a $32 billion outflow in Q2
October 7, 2022
Investors withdrew a whopping $32 billion from hedge funds during the second quarter of 2022. The outflows were the largest that the $4.1 trillion industry has witnessed since the start of the covid-19 pandemic in the first quarter of 2020.
The declines could well continue as central banks commit themselves to raise rates as a means to curtail inflation. The lackluster second quarter returns further discouraged investors to stay. A recent report from Preqin said returns fell 8.8% in North America-focused hedge funds while their European counterparts fared partially better with declines limited to 5.7%.
However, most of the outflows were from Europe-focused hedge funds that saw withdrawals to the tune of $28.4 billion in Q2. Over the past five years, funds focused on the US and APAC returned 8.55% and 6.9% returns respectively while those focused on Europe managed only 3.5%.