Asset Flows Update for the Month of October 2012

November 2012 Hedge funds ended their winning run in October with flat-to-slightly-negative returns for the month. 1 The Eurekahedge Hedge Fund Index was down 0.19% during the month bringing its October yearto-date (YTD) return to 4.11%. The month witnessed a difficult trading environment for hedge funds as 2 underlying markets witnessed trend reversals across a variety of sectors. The MSCI World Index dropped by 0.76% in October. Total assets under management (AUM) decreased by more than US$11 billion during the month, bringing the total size of the industry back to US$1.76 trillion. Revised figures based on late reporting funds for September showed that the industry had expanded by US$20 billion. Hedge funds posted losses of US$5.8 billion in October with mixed returns across the different strategies. Net asset flows for the month were also negative as investors withdrew US$5.7 billion from the industry. Figure 1: Summary monthly asset flow data since January 2010

1800

40

Total assets in US$ billion

20

1600

(20)

1400 Jan-10 Jan-11 Jul-10 Performance-based growth Source: Eurekahedge Jul-11 Jan-12 Net asset flows

(40) Jul-12 Total assets

Key highlights for October 2012:

Hedge funds saw their winning streak end with a loss in October but they remain in the black, up 4.11% YTD There are currently over 1300 funds up more than 10% YTD 2012, and almost 700 funds up more than 15%

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Based on 65.59% of funds which have reported October 2012 returns as at 16 November 2012 MSCI AC World Index All Core USD

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Asset flow in US$ billion

November 2012 | 1