Investors pulled an estimated $ 14.2 billion from the $ 3.03 trillion hedge fund industry in October, bringing the total amount of money pulled from hedge funds to $ 77 billion so far this year, according to eVestment’s October Hedge Fund Industry Asset Flow Report.
October marked the seventh month of the 10 so far in 2016 when more investors pulled money out of the asset class than allocated fresh capital. Hedge funds have been under pressure from investors after years of poor performance and criticism over high fees.
The eVestment report painted a gloomy picture of the state of the hedge fund industry, noting that many investors were bringing investment in-house and investing more in passive strategies.
The report said: “It is clear the industry is experiencing a crisis-like wave of negative investor sentiment….The result for the hedge fund industry, for now, appears to be stagnation at best, and slow erosion at worst.”
But the research firm added: “Hedge funds continue to face difficult times, but the $ 3 trillion industry is not on the verge of disappearing.”