November 2011 Asset Flows Update

Eurekahedge November 2011 Hedge funds were up 2.04% in October as markets reversed sharply from the downtrend seen in the previous two months. Better than expected economic data from the US, as well as moves by European leaders to recapitalise European banks and address the debt crisis, resulted in a surge of 2 optimism among investors. The MSCI World Index gained 8.65% during the month which witnessed rallying markets across the regions. However, the hangover from August and September led to further outflows from the sector. Total assets in the industry declined by US$4.5 billion in October, driven primarily by the redemption pipeline built up since August and September. Additionally, newly available data for September shows that the sector declined by over US$60 billion during the month, with net negative asset flows accounting for US$32 billion. Although the industry has posted a significant recovery from the financial crisis over the last two years, these numbers indicate that investors remain edgy and will start to withdraw their capital based on movements in the underlying markets. Figure 1: Summary monthly asset flow data since December 2008
1800 40 20
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Total assets in US$ billion

1600

0 (20)

1400 (40) 1200 (60) (80) 1000

Dec- Feb- Apr- Jun- Aug- Oct- Dec- Feb- Apr- Jun- Aug- Oct- Dec- Feb- Apr- Jun- Aug- Oct08 09 09 09 09 09 09 10 10 10 10 10 10 11 11 11 11 11

(100)
Performance-based growth Net asset flows Total assets

Source: Eurekahedge

Key highlights for the month of October:

The Eurekahedge Hedge Fund Index witnessed its largest gain for the year up 2.04% in October The Mizuho-Eurekahedge Top 100 Index remains in the black during October up 2.61% YTD

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Based on 57.28% of funds which have reported October 2011 returns as at 12 November 2011 MSCI AC World Index All Core Local

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Asset flow in US$ billion

November 2011 | 1