* Investors withdrew $9.3 bln from European funds
* Credit, macro funds saw inflows
By Katya Wachtel
NEW YORK, June 20 Investors cut their exposure
to hedge funds that invest in and are located in Europe during
May as the euro zone financial crisis wrought havoc on global
markets, data showed on Wednesday.
Investors last month withdrew about $9.3 billion from hedge
funds located in Europe and pulled $9.1 billion from hedge funds
that invest mostly in Europe, hedge fund tracking firm
"The higher rate of decline has been from those funds
investing primarily in European markets and the reason is fairly
straightforward; a lack of desire for exposure to European
corporates, whether hedged or not, which are being impacted by
the region's slowing growth and sovereign difficulties," said
Peter Laurelli, vice president of research at eVestment|HFN.
Laurelli noted that the reasons for withdrawals from hedge
fund managers based in the euro zone may be due, in some part,
to investor concerns about the counterparty exposures those
managers could have to Europe's troubled financial institutions.
Funds that focus on emerging markets also saw outflows last
month, eVestment found. For the ninth consecutive month investor
withdrawals outpaced allocations to those managers, with $1.1
billion in redemeptions in May.
"The persistence of the current slide of investor assets
from emerging market funds is unlike any we have seen since
tracking fund flows back to 2003 and is only eclipsed in
magnitude (but not duration) by redemptions during 2008 and
2009," eVestment|HFN said in its report.
Despite performance losses of $28.3 billion in May, the
hedge fund industry recorded net inflows last month of $9.5
billion. Hedge funds on average lost over 1 percent in May.
INFLOWS FOR CREDIT, MACRO, EQUITY FUNDS
Investors sent money to credit and macro funds in May, and
pulled capital from commodity and managed futures funds.
Credit-focused managers, which gained more than 4 percent
last month, gained $9.5 billion in May.
Macro funds had inflows of $2.7 billion, and equity funds
gained $1.9 billion. It is only the second time in 11 months
that stock-focused funds saw inflows beat redemptions. Those
funds rose 2.4 percent in May.