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Inflows to hedge funds down 64% after Amaranth collapse |
Date: Friday, January 19, 2007
Author: Bloomberg News, ChicagoTribune.com
Hedge-fund inflows declined 64 percent in the fourth quarter from the record pace of the previous three months, as investors reacted to the collapse of Amaranth Advisors LLC.
Fund managers attracted $15.8 billion in the final three months of the year, compared with $44.5 billion in the third quarter, Chicago-based Hedge Fund Research Inc. said Thursday. Net deposits for the full year were $126.5 billion, the most ever and more than double the $46.9 billion raised in 2005.
Hedge funds returned an average of 1 percent from April through September, and some investors shifted strategies after the September collapse of Amaranth. Funds returned 13 percent for all of 2006, compared with 15.8 percent by the Standard & Poor's 500 index, the firm said.
"The third quarter was particularly weak, and after that, some investors pulled back on allocations," said Brett Barth, partner at New York-based BBR Partners, which farms clients' money out to hedge funds.
"After Amaranth, people pulled money from managers with similar strategies. Fourth-quarter performance for hedge funds was really good, so my guess is you'll see a pick-up in assets in the first quarter of this year."
Hedge funds managed $1.43 trillion as of Dec. 31, a 29 percent increase from a year earlier, Hedge Fund Research said.
Fund managers attracted $15.8 billion in the final three months of the year, compared with $44.5 billion in the third quarter, Chicago-based Hedge Fund Research Inc. said Thursday. Net deposits for the full year were $126.5 billion, the most ever and more than double the $46.9 billion raised in 2005.
Hedge funds returned an average of 1 percent from April through September, and some investors shifted strategies after the September collapse of Amaranth. Funds returned 13 percent for all of 2006, compared with 15.8 percent by the Standard & Poor's 500 index, the firm said.
"The third quarter was particularly weak, and after that, some investors pulled back on allocations," said Brett Barth, partner at New York-based BBR Partners, which farms clients' money out to hedge funds.
"After Amaranth, people pulled money from managers with similar strategies. Fourth-quarter performance for hedge funds was really good, so my guess is you'll see a pick-up in assets in the first quarter of this year."
Hedge funds managed $1.43 trillion as of Dec. 31, a 29 percent increase from a year earlier, Hedge Fund Research said.
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