Hong Kong hedge funds’ US$1 billion redemptions in the third quarter one of the largest since 2009 global crisis: Eurekahedge

Investors took about US$1 billion out of hedge funds in Hong Kong in the third quarter, one of the largest quarterly outflows in the city since the global financial crisis a decade ago, according to a new report by Eurekahedge.

The net investor redemptions in the three months ended September came as the city’s economy has struggled against the backdrop of the US-China trade war and one of the worst political crises in the city’s history.

The redemptions matched the US$1 billion in outflows in the second quarter of 2016. The largest quarterly outflows in the past decade were US$6.4 billion in the first quarter of 2009 and US$2.6 billion in the second quarter of that year, the financial data provider said.

Mohammad Hassan, head analyst for hedge fund research at Eurekahedge in Singapore, said the Hong Kong redemptions, however, were “not very significant” when viewed against the US$121 billion that has flowed out of hedge funds globally over the course of this year.

“The political crisis in Hong Kong is yet to pose any meaningful threat to the region’s resilient hedge funds industry,” Hassan said. “The opportunity and access that managers based in Hong Kong provide to Chinese onshore markets and to the broader region as a whole is unlikely to be eclipsed in the near term unless things really spiral out of control.”