LONDON Nov 12 Investors put more cash into
hedge funds than they withdrew over the past month, attracted
back into the sector by one of the few recent months in which
managers outperformed stocks, new data showed on Monday.
Net inflows into hedge funds, as measured by the SS&C
GlobeOp Capital Movement Index, which tracks monthly net
subscriptions to and redemptions from funds, were 0.54 percent
of the total during the month to November 1.
The inflows partly reverse exits in the prior month, when
investors pulled more money from the industry than they put in
for only the third time this year.
The new money is less than the amount investors put into the
industry over the same period last year, however. In the month
to November 1 2011, inflows totalled 2.01 percent of the total.
Bill Stone, Chairman and Chief Executive Officer at SS&C
Technologies, said nervousness ahead of the U.S. election result
likely encouraged some investors to pause before allocating more
capital, despite the positive performance.
"That put a few people on the sidelines. I think there was a
reticence on all financial instruments about where to go," he
Some investors may even exit hedge funds over the next few
months, Stone said, so that they can bank profits before an
expected move by President Obama to raise taxes on the wealthy.
The inflows into the industry the past month came as the
average hedge fund made money. The SS&C GlobeOp Hedge Fund
Performance Index rose 0.13 percent during October, bringing
2012 gains to 8.08 percent.
While last month's gains were small, importantly for the
hedge fund industry, the rise beat most major equity indices.
The S&P 500 dropped 1.4 percent, while the FTSEurofirst 300 was
Hedge funds - which can bet on asset prices falling as well
as rising - tout themselves as investors who can make money in
all markets, including when equities sell off.
The average hedge fund still lags most stock markets this
SS&C GlobeOp's data covers around $187 billion of hedge fund
assets under administration, or around 8 to 10 percent of the
global hedge fund industry.