Assets managed in hedge funds globally declined 1.4% to $2.856 trillion in the quarter ended March 31, net flow data from Hedge Fund Research showed.
Net outflows of $15.1 billion represented the largest quarterly withdrawals from the hedge fund industry since the second quarter of 2009, said HFR's summary of its first-quarter data analysis that was released Tuesday.
In addition to net investor outflows, $25.7 billion of performance-related declines contributed to the quarterly decline of total assets, HFR reported.
Returns of HFR's primary indexes were negative in the three months ended March 31: the HFRI Fund Weighted Composite index was down 0.67%; the HFRI Asset Weighted Composite index declined 2.19%; and the HFRI Fund of Funds Composite index was down 2.83%.
By contrast, other major market index returns outperformed the hedge fund indexes. The Standard & Poor's 500 returned 0.77%; MSCI All-Country World, -0.22%; and Barclays Capital U.S. Aggregate Bond index, 3.03%.
“The hedge fund industry began 2016 with a fractional decline as widely anticipated asset outflows associated with manager-initiated return of investor capital and private family office conversions were only partly offset by new investor allocations in Q1,” said Kenneth J. Heinz, HFR's president, in the summary.
“The volatile performance environment continues to be dominated by intense dislocations, sharp reversals and rapidly shifting correlations across assets … these are likely to contribute to performance gains as investor capital is reallocated into funds and strategies positioned for this environment through midyear,” Mr. Heinz added.