Investors pulled nearly $100 billion from hedge funds in 2019, the largest outflow in three years. However, UBS argues this should not be seen as a sign that hedge funds are becoming less popular. While some investors reduced allocations to hedge funds overall, assets continued to rise to a record high of $3.3 trillion due to strong returns in 2019. UBS says larger hedge funds with over $5 billion in assets managed to attract more capital or see fewer redemptions compared to smaller funds.

1. 1/29/2020 Investors pulled nearly $100 billion from hedge funds. But don’t write them off just yet says UBS - MarketWatch
https://www.marketwatch.com/story/investors-pulled-nearly-100-billion-from-hedge-funds-in-2019-but-dont-write-them-off-just-yet-says-ubs-2020-01-27 1/5
Investors pulled nearly $100 billion from hedge funds. But
don’t write them off just yet says UBS
By Lina Saigol
Published: Jan 28, 2020 8:34 a.m. ET
An employee views trading screens (Photo by Carl Court/Getty Images)
Don’t write off hedge funds just yet.
That’s the message from UBS UBS, +0.96% which says that reduced allocations to the asset class should not be viewed as a sign that their popularity is
waning.
0
Getty ImagesGetty Images
Home  Industries  Banking
0 Sign Up • Log In 

2. 1/29/2020 Investors pulled nearly $100 billion from hedge funds. But don’t write them off just yet says UBS - MarketWatch
https://www.marketwatch.com/story/investors-pulled-nearly-100-billion-from-hedge-funds-in-2019-but-dont-write-them-off-just-yet-says-ubs-2020-01-27 2/5
Investors yanked $98 billion from hedge funds in 2019, the largest amount in three years, according to U.S. research platform eVestment.
In December alone, more than $16 billion was withdrawn from the industry. “Though December wasn’t as bad as many past Decembers, there is no masking
that December 2019 out ows are emblematic of what was one of the more dif cult years the industry has faced. The year marked the industry’s second
consecutive annual out ow,” eVestment said in a report.
But Mark Haefele, chief investment of cer at UBS, said in a note on Monday that this should be seen “as evidence of investors’ increased sophistication and
better understanding of what such strategies can deliver in terms of risk and return.”
And while some investors may have reduced allocations to the asset class overall, hedge fund assets continued to rise amid strong returns, hitting a record
high at $3.3 trillion according to the Hedge Fund Research database (HFR).
Last year, hedge funds returned on average 10.4%, their best gure since 2009.
Haefele said that managers with assets under management (AUM) above $5 billion are continuing to attract capital or suffer less from redemptions. They
registered total out ows of about $8 billion, compared with $32 billion for managers within the $1-5 billion AUM range.
The eVestment report said investors are shifting money from hedge funds to private markets, across equity, credit and real assets. “This is potentially a
re ection of investors’ emphasis on more specialized strategies and the search for a better diversi er with a multi-asset portfolio,” UBS’ Haefele said.
MORE FROM MARKETWATCH
Here’s everything coming to Net ix in February 2020 — and what’s leaving
My retirement income is $95,000 a year, and I want a walkable, affordable beach
town to spend the winter. Where should I retire?
Scientist who simulated the global impact of a coronavirus outbreak says ‘ the
cat’s already out of the bag’ and calls China’s efforts to contain the disease
‘unlikely to be effective’
WE WANT TO
HEAR FROM YOU
Join the conversation
COMMENT
QUOTE
REFERENCES
UBS
+0.12 +0.96%
MARKETWATCH
PARTNER CENTER
MOST POPULAR
There’s only one stock
millennials prefer over
Amazon and Tesla
0 Sign Up • Log In 