Hedge fund advisers Hennessee Group estimate that hedge fund assets decreased by $782 billion over 2008, the worst net outflows in the sector’s history.
The decrease in assets represents a 39 percent fall since the beginning of the year, although it only brings assets back to 2006 levels. Hennessee estimates that the fall was roughly split between redemptions (20 percent) and negative performance (19 percent).
Meanwhile, the Hennessee Hedge Fund Index declined 19.2 percent over the course of the year. Total assets for arbitrage and event driven funds were down approximately 43 percent in 2008. Total assets for global/macro funds declined 40 percent.
Going into 2009, Hennessee Group Research finds that fund of hedge funds represent the largest single source of capital for the industry, or 32 percent.
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