Research

Asset Flows Update

Introduction

The Eurekahedge Hedge Fund Index was up 0.34% in March1 while underlying markets as represented by the MSCI World Index2 gained 0.79% over the same period. Among regional mandates, Asia ex-Japan managers led the table, up 2.02% during the month followed by European managers who were up 0.73%. Across strategies, long/short equities hedge funds led the table with gains of 1.06% followed by event driven hedge funds which were up 0.47%.

Final asset flow figures for February 2017 revealed that managers reported performance-based gains of US$17.6 billion while recording net asset inflows of US$11.7 billion. Preliminary data for March shows that managers have posted performance-based gains of US$2.7 billion. Preliminary net asset flows were positive in March with US$9.3 billion of inflows into the industry. Redemption pressure appears to have eased though a clearer picture should emerge in the coming months on the outlook for investor allocation into hedge fund regional and strategic mandates. This brings the current assets under management (AUM) of the global hedge fund industry to a total of US$2.27 trillion.

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

 

Key highlights for March 2017:

  • Hedge funds were up 0.34% in March with Q1 2017 gains coming in at 2.29%. Investor subscriptions have picked up pace since the start of the year, with net inflows coming in at US$26.1 billion.
  • North American hedge fund industry AUM reached a US$1.53 trillion record high. As at 2017 year-to-date investor subscriptions stood at US$23.9 billion, with US$15.2 billion of performance-based gains recorded over the same period.
  • The US$266.7 billion CTA/managed futures mandated hedge fund industry saw the highest net investor inflows of US$16.4 billion among strategic mandates for Q1 2017. Managers posted performance-based losses as of Q1 2017 totalling US$0.8 billion.
  • AUM for long/short equities hedge fund managers grew by US$8.3 billion over Q1 2017 with strength led by performance-based gains of US$12.9 billion. Long/short equities hedge fund managers are up 3.82% over the first quarter of the year.
  • Asian managers saw investor subscriptions of US$1.8 billion as of Q1 2017, with performance-based gains of US$3.1 billion. As of Q1 2017, Asia ex-Japan managers were up 5.73% with underlying Greater China and Indian managers up 2.88% and 4.18% respectively. Japan focused funds were up 1.66% over the same period.
  • European managers gained 0.73% during the month, with year-to-date gains coming in at 2.11%. The US$508.7 billion European hedge fund industry was the only region to witness year-to-date investor redemptions of US$1.3 billion while performance-based gains of US$4.1 billion were recorded.
  • Sub-billion dollar hedge funds recorded strong investor interest as of 2017 year-to-date, with net inflows totalling US$12.4 billion. Within sub-billion dollar hedge funds, mid-size funds managing between US$100 million and US$500 million have seen inflows of US$8.9 billion.

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Footnote
1Based on 48.41% of funds which have reported March 2017 returns as at 12 April 2017
2 MSCI AC World Index (Local)
 
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