Reuters – Societe Generale’s $10 billion (5.3 billion pound) hedge fund arm has slashed its allocation to energy amid a slump in oil prices, highlighting a broader move out of the high-riskinvestment vehicles, its manager said on Friday.
Investors who have ploughed money into hedge funds chasing big returns in recent years are now withdrawing it faster than at any time this decade, Arie Assayag, global head of hedge funds at Societe Generale’s Asset Management’s Alternative Investments unit, told Reuters in an interview.
“This year has not been an easy one in hedge funds — some are still recovering losses,” he said. “This is the most serious drawdown in hedge funds since 1998.”
Assayag’s unit sharply boosted its own holdings of energy stocks and energy market exposure through hedge funds this year, but has since cut back this allocation to a third of its peak in May. It declined to publish the exact figures.
The influx of hedge funds into energy and commodities markets that began three years ago gathered pace last year, drawing blame for inflating prices and increasing volatility while flummoxing some analysts who said prices defied fundamentals.
