A new report shows hedge funds have lost a new record high of $11.57bn from investors withdrawing their money for the month of April.
This is the sectors biggest month of outflow so far per HedgeWeek.
“While outflows were seen across the board, equity hedge funds saw the biggest redemptions with $8.94 billion of funds removed during the month.
Hedge funds focused on fixed-income and credit strategies, meanwhile, bucked the outflows trend during in April, with a combined $1.7 billion of inflows, boosting their flows so far this year by $5 billion.”
In the week ending May 26th 2023, the Nasdaq eVestment revealed that investors pulled $11.57 billion out of hedge funds in April.
“Probably the most interesting point about this April’s aggregate flow data is that it was another month where redemptions were not concentrated among few, but relatively spread across many,” the eVestment report said.
“Investor attention has been focused on the U.S. debt-ceiling talks in Congress, which could impact the need to raise the government’s borrowing limit.
This has added to market uncertainties and potentially influenced the decision to lighten equity investments,” said MW.
Similarly, we’ve begun to see massive bank withdrawals this year.
Depositors withdrew nearly $100 billion from big banks such as JPMorgan, Bank of America, Citi, and Wells Fargo during the first quarter of 2023.
Recent Hedge Fund News
The Securities and Exchange Commission (SEC) approved a rule in May that will require big hedge funds to report losses in near real-time.
Bloomberg says this marks a significant shift for an industry that tends to prize its secrecy.
“It also promises to add to businesses’ administrative headaches.
Until now, funds have generally had to report positions in quarterly public filings.”
Large hedge funds will have no more than 72 hours, or “as soon as practicable,” to tell the agency about extraordinary investment losses and major margin events.
The rule is part of a campaign by SEC Chair Gary Gensler to scrutinize private investments funds, whose wagers — both winning and losing — can reverberate through financial markets.
The SEC says the stepped-up reporting by hedge funds that oversee at least $1.5 billion in assets will let Wall Street’s main regulator, as well as the Treasury Department and other agencies in Washington, get a handle on swift-moving events that may pose systemic risks.
“Private funds have evolved significantly in their business practices, complexity and investment strategies,” Gensler said.
“Private funds today are ever more interconnected with our broader capital market.”
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