Hedge funds suffered some big redemptions in June, with investors pulling approximately $20.7 billion in the month alone, making it one of the largest non year-end outflows since 2009, according to a new eVestment Hedge Fund Asset Flows report.
As a result, net flows to hedge funds for the second quarter were negative $10.68 billion. The first half of 2016 saw net flows of negative $27.95 billion.
This also marks the third consecutive quarter of negative flows from the hedge fund industry. As a result, global hedge fund assets have now dipped below $3 trillion again to $2.99 trillion.
Poor performance tends to result in investors pulling money. What’s more is the Brexit decision likely didn’t have much an impact this time on redemptions.
“While there are exceptions, investors are clearly dissatisfied not only with 2015 returns, but also with performance from portions of the industry in 2016. The result of the Brexit vote, and its impact on returns across the industry, has likely not been factored into investor flows to this point given redemption requests typically require at least a month’s notice,” the report said.
Most of the money was pulled from equity-focused strategies, especially from long/short equity and event-driven funds, the report said. The ten long/short equity funds with the largest outflows in June fell an average of 6.13% in the first quarter, and were down an average of 8.27% year-to-date, the report said.
Meanwhile, commodities funds were one of the few bright spots. Commodity funds saw approximately $3.32 billion added in the second quarter. It was also the ninth straight month of positive inflows, the report noted.
Julia La Roche is a finance reporter at Yahoo Finance.