Having served in the military I learned to 'about turn' with the best of them however, sometimes our square bashing did not go according to plan. One such memorable moment was at my 'passing out parade'. My family were there and all eyes were upon us.
Just as a formation of Jet Provosts went over head our newly promoted Flight Lieutenant announced 'eyes halt' when of course it should have been 'eyes right'. There were a few stumbles, but we believe that the jets over head were enough of a distraction for us to get through it..My mother never noticed.
Unfortunately for Trimtabs and Barclays, the moment where all eyes were upon them did not have such a distraction and they have come out with a little egg on their faces on their particular 'about turn'
Having reported that there would be $32 billion leaving hedge funds in July the converse was true with $39 billion flowing in. The July outflows that were estimated by TrimTabs and Barclay Group in early September seemed to confirm concerns that there was trouble ahead. At the time, TrimTabs said de-leveraging and risk reduction by funds of hedge funds was a major cause of the turbulence in credit and equity markets in July and August.
On Wednesday the firms said the the report had been 'miscalculated' and the problems were not as bad as reported.
"We apologize for the incorrect hedge fund flow estimates for July," said TrimTabs Chief Executive Officer Charles Biderman. "The monthly hedge fund flow data is a new service and the changes we made to our methodology will ensure that our current and future estimates are as accurate as possible."
It appears that the problems highlighted in the data were incorrect for a couple of reasons. Firstly adjustments were not made for the reporting of funds of hedge funds, which tend to report flows with a significant lag because they have to consolidate returns from their underlying managers first. Secondly, funds were included in the estimate that updated their performance but not their assets under management.
As a result, those funds that posted positive returns were incorrectly reported as posting outflows equal to their asset growth from performance, TrimTabs and Barclay Group said.
All is not lost for our friends, however, as the impact of credit market turmoil this summer on hedge funds was evident in August data compiled by the firms. The $8.9 billion August inflow was the lowest since $7 billion flowed into hedge funds in January, they estimated. Fixed-income hedge funds posted the biggest outflow in August, losing an estimated $1.7 billion, they noted.
"Many investors were probably nervous about putting fresh cash to work until they could assess the fallout from the sub prime mortgage mess," said TrimTabs President Conrad Gann.
OK guys, we will let you off this time (mainly becuase we reported it too..). Lets call it 'telling the truth in advance'....