Investors pull out $43bn, Hedge Fund dead

TPG-Axon, a hedge fund run by a former Goldman Sachs trader, spared no words when writing its investors about September.

In a 13-page letter, Dinakar Singh wrote that the last quarter for his fund was “abysmal,” with the emphasis in the original text. “We are sorry to have let you down with the terrible performance of this porfolio,” Mr. Singh wrote.

Troubles mounted for some of the world’s biggest hedge funds on Thursday as Highland Capital Management told investors it was shutting down two of its funds and details emerged of big losses at TPG-Axon.

The problems in the sector have set in motion a vicious cycle in the markets as hedge funds sell holdings to return money to worried investors, triggering further price declines and prompting more withdrawals. Investors pulled at least $43bn (€bn, £bn) from hedge funds in September, according to TrimTabs Investment Research