The hedge fund industry contracted in September, seeing net outflows of $34.5 billion in the month and an additional $44.5 billion lost through performance, based on 65% of the asset flows reported to a database maintained by Eurekahedge, a hedge fund research and data provider. This brings the total size of the hedge fund industry to $1.8 trillion, down from $1.9 trillion at the beginning of the year.
However, while there were $45 billion of redemptions in September, there were $10.5 billion of inflows as investors switched to more successful strategies.
In the third quarter, the industry fell $155 billion, of which 72% was due to performance.
In the past year, the industry has shed $90 billion primarily because of performance, but net investments into the global hedge fund industry are still positive at $21 billion.