Hedge Funds

Investor churn rate rises while inflows decrease


Weakened inflows, increased churn

It has been apparent for some time that overall inflows to the hedge fund industry have fallen. But it is now becoming increasing clear that investors are at the same time moving capital among funds at a much higher rate.

An analysis by Morgan Stanley shows that while new cash inflows nearly halved in the second quarter - dropping to $10.9 billion from a massive $27.3 billion in the first quarter - strategic reallocations of capital by investors among their existing deployments increased to $8.92 billion from a mere $1.85 billion the