Assets managed by single-manager hedge funds dropped by $208 billion or 10.8% in the first quarter to $1.7 trillion, according to database tracker HedgeFund.net.
Contributing to the first-quarter decline was a net $218 billion of redemptions and fund closures that accounted for $13 billion of outflows. Positive performance of $22 billion reduced the total industry hit.
By contrast, assets managed at the end of the first quarter of 2008 were down 1.2% from the prior quarter to $2.8 trillion. While investment performance was down $83 billion, net inflows were positive at $43 billion and new fund launches added another $5 billion.
The first quarter 2009 decline was an improvement over the fourth quarter of 2008, when assets declined $584 billion or 23.2% to $1.9 trillion $173 billion of performance losses, $405 billion of net redemptions and $6 billion of liquidations.
Despite the first quarter decline, HedgeFund.net researchers noted in a news release that the rate of monthly hedge fund outflows is slowing: Net outflows totaled 1.01% in March, compared to outflows of 2.5% in February, 7.6% in January, and the peak of 8.8% in December.