Investors pulled at least $43bn from US hedge funds in September amid market turmoil, according to data from TrimTabs Investment Research. The unprecedented withdrawals come as hedge funds work to prevent far bigger redemptions by the end of the year, when many funds give investors a chance to take out money. The chief executive of a top alternative investment manager said he expected the hedge fund industry to shrink by 50% in coming months – with half the decline coming from withdrawals and half from investment losses. Some hedge funds are offering to suspend fees if investors keep their money in until March. TrimTabs said its estimate of September withdrawals were based on preliminary data and that the final tally would probably be higher because funds with heavy redemptions tended to report data later. JPMorgan has estimated that hedge fund outflows could total up to $150bn over the coming year, leading to asset sales worth about $400bn.

This entry was posted by Gwen Robinson on Thursday, October 16th, 2008 at 5:35 and is filed under Capital markets, Hedge funds. Tagged with TrimTabs. Edit this entry.