Investors Increasingly Disenchanted with Hedge Funds, Surveys Show

Two recent surveys indicate net outflows, worries about performance in the longer term.

On the face of it, the hedge fund industry is seemingly healthy, despite several years of underperformance. Year-end assets rose to a record $2.602 trillion, according to industry tracker eVestment.

Beneath the headline news, however, there are some troubling signs that investors in hedge funds are starting to become uneasy with the mediocre returns being posted by many funds.

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