Hedge funds lose $100 bln in October

Bloomberg

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Funds fell an average 3.3 percent, based on preliminary figures from the Singapore-based data provider, as measured by the Eurekahedge Hedge Fund Index, which tracks the performance of more than 2,000 funds that invest globally. That compares with a 19 percent slide in the MSCI World Index last month.

The biggest market losses since the Great Depression and investor withdrawals hurt the $1.7 trillion hedge funds industry that manages largely unregulated pools of capital. The index of global funds has lost 11 percent this year, set for the worst performance since 2000 when Eurekahedge began tracking the data.

"This wave of redemptions in the hedge fund industry is going to last for at least another six months," said Toyomi Kusano, president of Kusano Global Frontier, a hedge fund research firm in Tokyo. "There are some funds that halted withdrawals, but those would eventually have to defreeze, and that means another similar wave."

Earlier this week, Sparx Group, Asia's biggest hedge fund manager with $8.5 billion in assets, posted a first-half loss on redemptions and falling stock prices. Its assets under management on a preliminary basis were 839.1 billion yen ($8.8 billion) as of Oct. 31, compared with a peak of 2 trillion yen in August 2006.