Hedge-Fund Investors Pull Cash

Hedge-fund investors, rattled by lackluster performance, yanked more money from the industry than they added during the final months of 2011, data released Thursday showed.

The $2 trillion hedge-fund industry saw net investor withdrawals of about $127 million in the fourth quarter, according to data by Hedge Fund Research Inc. It was the first time investors had collectively pulled out more money than they put in since the second quarter of 2009, when the markets were still digging out of the worst of the financial crisis.

While the net withdrawals amounted to a tiny portion, 0.007%, of the industry's total assets, the pullback signals that some investors are losing patience. In each of the past three years, hedge funds' average returns have trailed the benchmark stock indexes, including the Standard & Poor's 500-stock index.