February saw a reversal of January’s positive start to 2023 with hedge fund industry AuM down $10bn. The downturn was wholly driven by outflows as performance had a slight uptick of $0.6bn during the month and compares favorably with the S&P 500 (-2.6%) and the Dow Jones (-4.2%) as the likelihood of a global recession during 2023 increased. No strategy attracted inflows during February with long/short equity (-$6.6bn) reversing January’s impressive performance gains ($13.3bn) after the end of the US equity rally and continued Fed fiscal tightening. Similarly, fixed income saw a decline in performance (-$1.5bn) after a strong January ($11.3bn), which echoes 2022 when both strategies had performance losses of $37.5bn and $25.1bn, respectively. As in January, North America had encouraging ($2.6bn) performance growth, reaching $6.4bn YTD, while Europe posted a stark reversal in performance growth (-$0.9bn) with monthly net outflows reaching $9.7bn.
Asset flows data since January 2021
Key highlights for February 2023:
- Industry AuM up $5.1bn in January.
- Industry AuM down $10bn in February.
- Downturn wholly driven by outflows as performance had a slight uptick of $0.6bn.
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No strategy attracted inflows in February.
- As in January, North America had encouraging ($2.6bn) performance growth, reaching
$6.4bn YTD.
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