Michael P. Regan is a Bloomberg Gadfly columnist covering equities and financial services. He has covered stocks for Bloomberg News as a columnist and editor since 2007. He previously worked for the Associated Press.

You've probably heard about the hole in the hedge-fund bucket that is causing assets to leak out. 

What's remarkable is that it's not so much an exodus from the entire alternative-management industry but rather from one specific strategy: funds that both buy and short stocks. Investor redemptions for the entire hedge-fund industry totaled $20.7 billion over the three months through July, according to Eurekahedge. In the same period, long/short funds had $18.4 billion withdrawn. An estimated $6.6 billion flowed out of long/short funds last month alone: 

Long and Short of It
Hedge funds that bet on stocks expected to both rise and fall are bearing the brunt of redemptions
Source: Eurekahedge

Long/short equity hedge funds are the biggest strategy, managing almost $800 billion of the $2.25 trillion invested in the industry, according to Eurekahedge's tally. But even as a percentage of assets, they are leaking money at the fastest rate: 0.8 percent of the amount of assets at the start of July, or almost three times the percentage lost in the strategy that saw the next biggest biggest withdraws, macro.

The long/short strategy has underperformed the overall market since the rally started in 2009, but outperformed during the past two bear markets. So this strategy may one day find redemption (pun intended), but it won't be pretty. 

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