Hedge Fund DE-Leveraging 101 ?

Below are a couple of poignant Hedge Fund industry facts that may help explain some of the stock market's recent sloppy action. In addition to providing perspective, perhaps this post could be interpreted to contain empirical EVIDENCE supporting Ken Heebner's recent assertions that the global markets are currently undergoing the Largest period of Hedge Fund DE-Leveraging since 1929 ! (FYI - please refer to my 10/09/08 post titled 'Heebner - Largest Margin Call Since 1929' for Heebner's specific comments):


* According to Hedge Fund Research Inc., the hedge fund industry suffered Record Losses during 3Q08 in both Redemptions (aka hedge fund investor withdrawals...minus $31 Billion) and Assets Under Management (minus $210 Billion) !


* According to TrimTabs Investment Research, investors withdrew a RECORD $43 Billion out of hedge funds during September 2008...Hedge funds also lost a RECORD 5.4% during September 2008..the largest single monthly loss for the industry since the 1998 collapse of hedge fund Long Term Capital Management)


* The HFR Global Hedge Fund Index, a benchmark for tracking hedge fund industry performance, is down 19.5% Year To Date...including being down 8.95% in the month of October alone)



Data Courtesy: TrimTabs, Hedge Fund Research Inc. + CNBC