The Morning Brief: Hedge Funds On Pace to Suffer Net Redemptions This Year

December 22, 2016   Stephen Taub


Investors continued to exit hedge funds in November. Redemptions came in at about $2.2 billion for the month, bringing the total amount of outflows for the year to $83.1 billion, according to the latest report from eVestment. This was the third straight month of redemptions and the fifth in the past six months.

Altogether, investors took out more money from hedge funds than they invested in seven of 11 months this year, almost assuring negative flows for the first year since 2009, according to the hedge fund data specialist. Even so, total assets once again moved above the magic $3 trillion mark thanks to strong performance. Although flows into event-driven funds were positive in November, they still exceed all other strategies for the year in terms of outflows, at more than $37 billion. They suffered more than $19 billion in redemptions in 2015 as well. Investors exited at the same time that event driven funds performed pretty well this year. Oh well. Long-short equity has suffered nearly $19 billion in redemptions for the year, second-worst among all strategies.

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Bridgewater Associates founder Ray Dalio has made an unspecified investment in eCurrency, a Dublin-based company that has created a technology to enable digital fiat currency to be issued by central banks, according to the company. Dalio made the investment through his private investment firm, DFO. It was part of eCurrency’s Series C funding round, led by eBay founder Pierre Omidyar’s Omidyar Network. "Having the backing of leading investors like Ray Dalio and Radicle Impact — who have championed countless breakthrough projects — is a testament to the momentum behind eCurrency as it comes to market," said Jonathan Dharmapalan, founder and CEO of eCurrency, in a press release. "They have been highly influential and effective investors in their space, and both are committed to the eCurrency mission." Digital fiat currency has the same legal status as notes and coins.

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Citadel founder Kenneth Griffin donated $12 million to the Chicago Park District to fund the completion of a trail project to provide a separate path for cyclists and pedestrians over an 18-mile stretch.

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Separately, Citadel announced that chief legal officer Adam Cooper is retiring, effective the end of February. Senior deputy general counsel Shawn Fagan was named general counsel of Citadel’s hedge fund business. Cooper was the multistrategy firm’s first chief legal counsel.


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