Research

Asset Flows Update

Introduction

The Eurekahedge Hedge Fund Index was up 0.64% in April1 while underlying markets as represented by the MSCI World Index2gained 1.17% over the same period. Among regional mandates, Asia ex-Japan managers led the table, up 1.28% during the month followed by European managers who were up 1.10%. Across strategies, event driven hedge funds led the table with gains of 1.44% followed by long/short equities hedge funds which were up 1.05%.

Final asset flow figures for March 2017 revealed that managers reported performance-based gains of US$4.7 billion while recording net asset inflows of US$11.8 billion. Preliminary data for April shows that managers have posted performance-based gains of US$3.2 billion. Preliminary net asset flows were positive in April with US$6.2 billion of inflows into the industry. Redemption pressure appears to have eased though a clearer picture should emerge in 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$2.28 trillion.

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

 

Key highlights for April 2017:

  • Hedge funds were up 0.34% in April with 2017 year-to-date gains coming in at 3.00%. Investor appetite for hedge funds has picked up pace since the start of the year, with net inflows of US$34.8 billion.
  • AUM for the North American hedge fund industry has reached a record high of US$1.54 trillion as of April 2017. Investor subscriptions for 2017 year-to-date stood at US$29.5 billion, with US$18.4 billion of performance-based gains recorded over the same period of time.
  • The US$260.6 billion CTA/managed futures mandated hedge fund industry saw the highest net investor inflows US$11.3 billion among strategic mandates for 2017. The top 25 best performing CTA managers with a combined AUM of US$30 billion were up 4.04% for the year.
  • AUM for long/short equities hedge fund managers grew by US$19.8 billion over the year with strength led by performance-driven gains of US$17.1 billion. Long/short equities hedge fund managers are up 4.81% for the year.
  • Asian managers saw investor subscriptions of US$1.6 billion in 2017 year-to-date, with performance-based gains of US$4.1 billion. As of 2017 year-to-date, Asia ex-Japan managers were up 7.12% with underlying Greater China and Indian managers up 8.73% and 13.89% respectively. Japan focused funds were up 2.04% over the same period.
  • European managers gained 1.10% during the month, with year-to-date gains coming in at 3.41%. The US$512.4 billion European hedge fund industry grew by US$6.5 billion as of April 2017 year-to-date.
  • Sub-billion dollar hedge funds recorded strong investor interest as of 2017 year-to-date, with net inflows totaling US$16.5 billion. Within sub-billion dollar hedge funds, mid-size funds managing between US$100 million and US$500 million have seen inflows of US$12.2 billion.

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Footnote
1Based on 43.79% of funds which have reported April 2017 returns as at 11 May 2017
2 MSCI AC World Index (Local)
 
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