The selloff in most of the global markets in the third quarter heavily impacted a large number of hedge funds.

In fact, not only did it put many funds into the red for the year, it pushed a huge number of hedge funds below their high water mark.
According to HFR, at the end of the third quarter just 19.3 percent of all hedge funds were above that critical level that determines whether their investors’ accounts are in the black. This is way down from 44.2 percent at the end of the second quarter and less than half the level of each of the three prior quarters.