This was largest ourflow since 2009 when investors withdrew over $130 billion from hedge funds. Since 2009 was a year of the recesion and market collapses, we can find in this data a different reason and that’s probably a very low return in average in 2016. Acording to the HFR data, hedge funds delivered an average return of 5,6% in 2016, well under the 11% gain of the S&P 500 last year. Well, we can say that investors are not satisfied with the profit, which is really too small in this industry. Eurekahedge is even more dramatic with the data, with 3,6% in average return in 2016, globaly.
If this trend continue in 2017, we may see a shakeout of those funds that have failed to meet investors expectation. As you can see in my graph, European funds are definitely the biggest disappointment, Asian are also under the 1% return in average, while Americas is above the 6%. But, is this enough? For huge institutional investments surely is, but I hope that ‘small’ investors with $5 to $15 millions will search the alternative and invest in private hedge funds, like our Aureus Invest is, with goal way much higher on yearly basis.