Global hedge funds suffered net outflows of $20.7 billion in June, as investors pulled more of their money out despite improved performance from most managers.
After inflows in April and May, the withdrawals took total aggregate net redemptions for the second quarter to $10.7 billion, according to data from eVestment, marking the third consecutive quarter in which money has left the sector. This represents the longest sequence of quarterly outflows since the second quarter of 2009, suggesting that investor dissatisfaction with managers' performance and fees may be intensifying.
In the first three months of 2016, hedge fund redemptions were the worst seen in any quarter for seven years, as investors withdrew more than $15 billion, according to data from Hedge Fund Research. Large insurers such as AIG and MetLife and pension funds including the New York City Employees' Retirement System have all recently cut or reduced their hedge fund allocations.
However, the industry produced positive returns in June amid the market volatility surrounding the UK referendum on leaving the EU. Hedge Fund Research's HFRI Fund Weighted Composite index gained 0.8 per cent, recording its fourth straight month of gains.
June's redemption figures do not take into account the aftermath of the Brexit vote, however, as hedge fund investors must typically give at least one month's notice to withdraw cash.
Popular sectors bucking the withdrawals trend in June included commodity funds, which recorded net inflows for the ninth month out of the past 10, the eVestment numbers show. Commodity-focused funds have returned 5.8 per cent this year, based on the HFR indices.