Hedge Funds Redeem $5.2 Billion in December 2011

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Industry Assets Sink to Lowest Level in Nearly Two Years

BarclayHedge and TrimTabs Investment Research reported today that hedge funds redeemed an estimated $5.2 billion in December 2011 and underperformed the S&P 500 for the year. Industry assets fell to $1.64 trillion, down 7.7% for 2011, and hit their lowest level since February 2010.

“The Barclay Hedge Fund Index fell 0.4% in December after decreasing 1.4% in November,” says Sol Waksman, founder and President of BarclayHedge. “From May 2011 onward, hedge fund performance was negative in every month except October.”

“Hedge funds underperformed the S&P 500 last year, falling 5.5% compared to a flat return for the S&P 500,” says Leon Mirochnik, an analyst at TrimTabs. In December, only three of 14 major hedge fund categories tracked by TrimTabs and BarclayHedge — Equity Market Neutral, Merger Arbitrage and Fixed Income — showed positive returns.

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