Wth the stock markets and mutual funds having such an unimpressive year, you might think that investors would be flocking to hedge funds. But the opposite has been true. According to Hedge Fund Research, hedge fund assets actually fell in the third quarter this year.
Assets held in hedge funds dropped 3 percent in the third quarter, down 3 percent over that time, to a total of $2.87 trillion. That's the first quarterly drop in three years, and the biggest quarterly drop in six years, since the recession.
It wasn't really a case of investors withdrawing money from these funds. Investor deposits saw a net increase over that time, but because of the turmoil in the markets, hedge funds overall lost enough money to create the overall decline.
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