WEST PALM BEACH, FL (HEDGECO.NET) – New data released by Hedge Fund Research Inc. [HFR] shows that asset inflows to hedge funds have slowed down considerably from levels seen recently. According toHFR, hedge funds took in $7.5 billion during the 2nd quarter of 2004. That sum represents about half of the average asset inflow into hedge funds during the previous quarters. HFR data conveys thathedge funds took in an average of $21.2 billion in the past previous quarters.
HFR research also revealed that hedge funds lost an average of 1% during the quarter, making this quarter one of the worst for hedge funds since 2002. Market analysts think the bad returns posted by hedge funds are the result of low volatility and the narrow trading range seen in the equity markets.
The president of HFR, Joshua Rosenberg, said “It was a difficult quarter for hedge funds to find opportunities to look for an edge,� adding, “Our data show that there has been a slowdown in inflows, but I don’t think it indicates trouble in the industry,” Rosenberg said.
While 2004 may have been a difficult year so far for hedge funds, Rosenberg thinks the industry remains strong, demand for hedge funds continue to be strong, and some hedge fund industry analysts think current slowdown may be overcome in the coming months. The global hedge fund industry has grown significantly over the past five years, hedge funds now oversee over US$1trillion in investor assets, and such growth may likely continue in light of growing interest from pension funds and endowments.
Paul Oranika
Editor-in-Chief
HedgeCo.Net
Email: [email protected]
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