Hedge fund assets shrank 7.4% in the first quarter, dropping total industry assets to $1.3 trillion, according to a report by Hedge Fund Research.
The quarterly decline included almost $104 billion in redemptions, which did not exceed the $152 billion redemptions record set in the fourth quarter.
Hedge fund-of-funds redemptions made up the majority of the drop for the quarter, with $85 billion withdrawn. That exceeds fourth-quarter withdrawals of $50 billion, dropping the total capital invested in hedge funds of funds to $525 billion as of March 31.
“Extreme investor risk aversion subsided into the end of the first quarter, but remained at elevated historical levels as industry consolidation continued through quarter end,” Kenneth J. Heinz, HFR president, said in a news release.