Investor redemptions from hedge funds at an all-time high

The deteriorating macroeconomic environment, according to Ben Crawford, head of research at BarclayHedge, has also contributed to the significant withdrawals from hedge funds in recent months.

“Rising interest rates, unchecked inflation, and increasingly dour economic forecasts, [to] name just a few. Investors trimming risk exposures and performing portfolio rebalancing at quarter-end likely had a multiplying effect on redemption activity from hedge funds,” Crawford told Institutional Investor.

Investors’ increasing interest in other asset classes, according to Peter Laurelli, head of global research at eVestment, is also a factor in the exodus from hedge funds.

Laurelli also clarified that prior performance also contributes to atonements.

eVestment statistics show that the funds with the 50 highest net inflows in 2022 gained an average of 17 percent two years ago, compared to the funds with the 50 largest net outflows in 2022, which only returned an average of 6.5% in 2020.