HSBCâ??s Geneva-based private bank saw clients withdraw more than $4bn from its hedge fund portfolios in the first half of the year, underlining the acute pressures facing the industry. The bank, which caters primarily to high net-worth individuals, said in a statement it had seen investors pull about SFr4.2bn from hedge funds in net terms between January and the end of June.
The pull-back will have exacerbated problems at HSBC Alternative Investments, the fund of funds business run by the private bank that is now estimated to have about $22.27bn in assets under management.
At its peak in September 2008, the division had an estimated $46.28bn in assets under management.
The 52 per cent decline has made HSBC Alternative Investments, in absolute terms, the single largest casualty of the redemptions crisis in the hedge fund industry.
Alongside HSBC Alternative Investments, many of the largest and most established fund of funds managers, such as Man Investments; Permal Asset Management; and Notz, Stucki & Ci, saw assets under management plummet.
Management at HSBCâ??s private bank attributed continuing redemptions from their clients in the first half to the bankâ??s decision not to chase market share or deposits by increasing rates and lowering margins.
Alexandre Zeller, chief executive, said that risk appetite among wealthy clients was beginning to return, however, and many were now looking to reinvest, having moved into cash a year ago.
