Research

Asset Flows Update

Introduction

The Eurekahedge Hedge Fund Index gained 1.33% in March1 while underlying markets as represented by the MSCI World Index2 gained 5.47% over the same period. Among regional mandates, Latin American managers posted the best gains, up 4.85% during the month followed by Asia ex-Japan hedge funds which saw gains of 4.78%. Across strategies, event driven hedge funds led the table with gains of 3.16% followed by distressed debt hedge funds, up 3.03% - an impressive rebound after their four-month losing streak.

Final asset flow figures for February revealed that managers reported performance-based losses of US$9.9 billion while recording net asset inflows of US$9.0 billion. Preliminary data for March shows that managers have posted performance-based gains of US$1.1 billion while recording net inflows of US$14.5 billion, bringing the current assets under management (AUM) of the global hedge fund industry to a total of US$2.24 trillion.

Figure 1a: Summary monthly asset flow data since January 2012
 

Key highlights for March 2016:

  • Hedge funds were down 0.37% as of Q1 2016, with total AUM declining by US$6.4 billion - the first Q1 decline in hedge fund assets on record since 2009.
  • Event driven hedge funds posted the best returns among all strategic mandates during the month, up 3.16%. On the other hand, CTA/managed futures managers posted the steepest decline during the month, down 1.61%.
  • Distressed debt hedge funds were up for the first time after a four-month losing streak, posting returns of 3.03% during the month. Total AUM for the strategy has declined by almost US$8.0 billion over the last 12 months.
  • Latin American hedge funds were up for the second consecutive month, leading the table with gains of 4.85% during the month. On a year-to-date basis, Latin American hedge fund managers also topped the tables gaining 6.15% - the only regional mandate to post positive year-to-date returns as of March 2016.
  • European managers posted their third consecutive month of performance-based decline, totaling US$7.8 billion on a year-to-date basis. On the other hand, European managers also recorded the highest investor allocations across all regional mandates – US$ 8.1 billion on a year-to-date basis.
  • Asia ex-Japan managers were up for the first time this year, gaining 4.78% during the month. Performance-based gains of US$1.2 billion were recorded while investors allocated US$ 1.5 billion into the mandate during the month.
  • The global hedge funds industry grew by US$108.7 billion in 2015 with investor inflows accounting for three-quarters of the gain in assets. For more details, please refer to the 2015 Overview: Key Trends in Global Hedge Funds report.

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Footnote
1 Based on 55.61% of funds which have reported March 2016 returns as at 14 April 2016
2 MSCI AC World Index (Local)
 
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