'Money Coming Out of Hedge Funds,' Credit Suisse's Leonard Tells BloombergTV
NEW YORK (TheStreet) -- Eighty-four percent of hedge funds surveyed in a new Credit Suisse (CS) - Get Report report said that they experienced some redemption activity in the first half of the year.
Robert Leonard, Credit Suisse Global Head of Capital Services, noted that 82% of those same hedge funds also said the money withdrawn would reallocate to other hedge funds.
"They were very targeted, specific types of redemptions based individually on fund performance," Leonard said on Bloomberg TV's "Bloomberg Go" on Tuesday. "What we've seen very much of is a performance oriented marketplace ... hedge funds have not thrown out the baby with the bathwater."
Defensive strategies are faring the best this year, but underperforming individual managers "did get hit with redemptions," Leonard noted. He believes that "what a lot of people don't recognize is that over the course of the year institutional investors are constantly tweaking their portfolios," which is business as usual for hedge funds.
"There is money coming out of hedge funds, but I would argue that right now it is being positioned on the sidelines to come back in for strategies and/or funds individually that are outperforming," Leonard added.