Outlook for hedge funds is about to worsen: Citigroup
New York
THE outlook for hedge funds, already closing at the fastest pace since the financial crisis, is about to worsen, according to Citigroup Inc.
Industrywide profits in 2014 declined 30 per cent from a year earlier to US$21.9 billion because of poor performance, the bank estimated in a report. Hedge funds returned an average of 1.4 per cent in 2014, their sixth straight year of underperforming US stocks, according to data compiled by Bloomberg, and the worst since 2011.
"Poor performance will be most acutely felt by small hedge fund firms," Sandy Kaul, global head of business advisory services at the New York-based company, said in the report, referring to those with an average of US$100 million in assets. "These funds simply did not generate enough performance-fee revenues in 20…
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