Many hedge fund investors in the U.K. are dissatisfied with weak returns over the summer, and are cashing out, the Financial Times reports.
“For us, it is a shuffling of the chairs on the decks,” said one hedge fund-of-funds. Certainly, wealthy individuals and pension funds are likely to be among those to prevail, whereas smaller investors and funds-of-funds probably don’t have the tolerance for poor performance.
“There are a lot of funds-of-funds that have been told by their investors that they can’t hold anything to do with credit, so they are looking to sell any liquid strategy,” said David Smith, head of multi-manager funds at GAM.
Two categories that among the worst-performing are structured credit and enhanced money market funds, both of which had exposure to U.S. subprime loans.
Enhanced money market funds “have been devastated,” said Diana Mackay of Lipper Feri fund information.
The staff of Money Management Executive ("MME") has prepared these capsule summaries based on reports published by the news sources to which they are attributed. Those news sources are not associated with MME, and have not prepared, sponsored, endorsed, or approved these summaries.