Hedge funds post $2.5 billion inflow for January, lowest since December 2005

By Paul A. Harris

St. Louis, March 5 - All hedge funds saw an estimated $2.5 billion of inflows during January, TrimTabs Investment Research and BarclayHedge reported on Wednesday.

That inflow follows another $2.5 billion inflow in December.

Those flows were the lowest since a $1.0 billion outflow in December 2005.

"Following two years of tremendous asset growth, inflows into hedge fund have fallen sharply as their performance has suffered amid the recent market turbulence," Sol Wacksman, chief executive officer of BarclayHedge, said.

The hedge fund industry delivered returns of negative 1.9% in November, 0.7% in December and negative 2.9% in January.

"To be sure, those returns were far superior to the returns of the S&P 500," Wacksman said. "But the hedge fund industry's performance in January was the worst since our records begin in 2000."

In the Wednesday report, Charles Biderman, chief executive officer of TrimTabs, commented that "hedge funds are doing a lot better than mutual funds, which are experiencing huge outflows."

In the six months from August through January, all equity mutual funds lost a staggering $49 billion, while hedge funds took in $74 billion.

"Investors in actively managed equity mutual funds may be realizing that it does not make sense to pay high fees for persistent underperformance," Biderman noted.

The TrimTabs/BarclayHedge database tracks hedge fund flows on a monthly basis, and the TrimTabs/BarclayHedge Hedge Fund Flow Report provides detailed analysis of these flows.

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