Hedge Funds See Largest AUM Fall Since Lehman: JPMorgan

Citing the third quarter HFR report from Hedgefundresearch.com, analysts at JPMorgan say that during the quarter, hedge funds witnessed the largest quarterly AUM decrease since the Lehman crisis and the worst returns since 2011. Nicholaos Panigirtzoglou and team at JPMorgan point out in their Oct. 23 report titled: “Worst year for HF performance since 2011” that their positioning signals indicate further room for near term short covering in EM.

AUM of hedge fund universe dropped by $95 billion

According to the JPMorgan analysts, thanks primarily to almost a negative 4% return on the quarter, the AUM of the HF universe declined $95 billion to $2.87 trillion. The analysts note that volatility had exhibited higher correlation historically with HF capital flows than HF performance....