Hedge fund assets decreased by two percent during the second quarter of 2005, from $1,080.8 billion to $1,059.2 billion. Managed futures grew by $100 million to $121 billion, an increase of 0.08 percent, according to The Barclay Group.
In spite of the second quarter decline, hedge fund assets have grown by $17 billion, or 1.63 percent, since year-end 2004. Fund of funds assets maintained their strength during Q2, climbing 11.64 percent, from $510.5 billion to $564 billion.
“We’re seeing redemptions from single manager funds even as money continues to flow into funds of funds,” says Sol Waksman, president of The Barclay Group. “The data supports the anecdotal evidence that high net worth investors, who typically have shorter-term time horizons and higher absolute return targets, have been selling while risk-averse institutional investors with longer-term time horizons have been buying.”
Seven of the 14 hedge fund sectors monitored by Barclay saw money under management decline during the second quarter, while five sectors rose and two remained unchanged.
Assets in the equity long-only sector fell 15.45 percent, from $22.0 billion to $18.6 billion. Convertible arbitrage continued its Q1 descent with a 13.72 percent decrease, dropping from $60.5 billion to $52.2 billion under management.
Emerging markets increased for the eighth straight quarter with an 8.83 percent gain, growing from $95.1 billion to $103.5 billion. The Event Driven sector rose 5.30 percent, from $94.3 billion to $99.3 billion.