Investors withdraw $4 billion from hedge funds in November – Nasdaq eVestment

By Nell Mackenzie

LONDON (Reuters) – Hedge fund withdrawals slowed in November as customer interest rose to the highest in 2023, data firm Nasdaq eVestment said on Wednesday.

Investors removed an estimated net $4 billion from hedge funds globally in November, compared to the $7.6 billion the industry lost in October, it said in a monthly report.

Just over half of hedge funds reported a net inflow in November, the highest monthly “win-rate value” seen this year, said the report, as institutions and family offices took money both in and out of the industry in almost equal measure.

In particular, so-called managed futures hedge funds – those trading trends in commodities, currencies and bonds – saw some of the biggest volumes of outflows and inflows.

The final result, a net $620 million of outflows, did not fully reflect the high amounts of money that flew in and out of this strategy, which fell short of 2022’s stellar returns, Nasdaq eVestment said.

The hedge fund industry has matured, said Don Steinbrugge, founder and CEO of the hedge fund consulting firm, in a separate note about his top predicted trends for 2024.

While there’s a large commitment to the hedge fund industry, “many major investment entities—such as pension funds, endowment funds, foundations… — seem to have reached a saturation point in fully allocating a percent of assets to hedge funds,” said Steinbrugge.

Future growth was likely to slow, he added.

The highest number of outflows came from stock pickers and multi-strategy funds that house different trading styles, both with a net outflow of about $1.3 billion in November.

Event-driven hedge funds and bond trading strategies saw inflows of $860 million and $400 million, respectively.

The industry in total saw a net $79.48 billion of outflows for the year 2023 to November end, said the report.

(Reporting by Nell Mackenzie; Editing by Dhara Ranasinghe and Jan Harvey)