38 billion redeemed from top performing hedge funds
Private equity and venture capital costs exceed profits
Pensions and endowments hold investments to avoid losses

LONDON, Dec 15 Reuters The best performing hedge funds are falling victim to their own success as institutional investors such as pension funds and university endowments cut back their most profitable positions to make up for pain elsewhere.

Investors yanked 38 billion from top performing hedge funds in the 12 months to endOctober, having pulled out 14 billion in the year earlier period, data from hedge fund specialist Aurum Research shows. These hedge funds returned, on average, more than 19 and 18, respectively, in the two 12month periods, Aurum Research said.

While it39;s not unusual to ditch low performing hedge funds and redeem profits seasonally, the current exodus is being driven by pension funds and universities sacrificing their strongest investments to hold on to private equity and venture capital portfolios that now cost more than they yield, more than a dozen people familiar with these deliberations say.

To avoid selling these investments at a likely loss, institutions would prefer to maintain them in the hope they regain value someday, the sources said.

The trend is set to continue into 2024, said the sources, which include family offices, fund of funds, board and trustee members of pensions and university endowments as well as private banks advising institutions and sovereign wealth…