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October 10, 2011 at 02:35 PM
Despite poor performance, hedge funds continued to see strong inflows in August, signaling investor aversion to traditional markets in a search for alternative sources of alpha.
Reuters reports hedge funds took in $6.1 billion in August as the industry outperformed slumping markets.
“August marked the seventh month this year when inflows into the $2 trillion hedge fund industry exceeded redemptions,” according to the wire service. “Hedge funds took in $51 billion in the first eight months of the year.”
But as Forbes’ Halah Touryalai notes, hedge fund performance overall just ended one of the worst quarters in history with losses across almost every strategy.
“According to Hedge Fund Research’s index, hedge funds suffered a decline of 2.9% in September bringing losses for the quarter to 5.5%,” Halah writes. “That performance made the third quarter of 2011 the fourth worst in the industry’s history following the third and fourth quarters of 2008 and the third quarter of 1998.”
