Hedge funds finished February with a 1.79% gain, making it the best performance in the last 12 months, on the back of strong recovery in global equity markets, according to Eurekahedge.

According to Eurekahedge’s March 2014 report, all hedge fund regional mandates also ended February in positive territory, with the exception of Japan-focused hedge funds.

All hedge fund strategies logged positive returns

The Eurekahedge report reveals that all hedge fund strategies clocked positive returns in February, with long / short equities managers outperforming their peers and delivering gains of 2.43% as global markets rallied during the month.

While distressed debt investing hedge funds posted their eighth consecutive month of positive returns, gaining 2.25%, multi-strategy, arbitrage and fixed income hedge funds gained 1.43%, 0.97% and 1.23%, respectively.

The following graph highlights strong returns posted by various strategies during January and February 2014:

Returns across strategies Hedge funds

Record AUM

The Eurekahedge report highlights that fund managers delivered performance-based gains of $15 billion and recorded net asset inflows of $11 billion during February. The month also marked the current AUM of the global hedge fund industry hitting $2.03 trillion, a new record high.

The following table depicts the performance-based changes in assets and asset flows in February 2014:

Performance based changes

The report also points out that all hedge fund regional mandates ended the month in positive territory with the exception of Japan-focused hedge funds, which were down 0.94% during the month. On a year-to-date basis, North American and Asia-ex Japan-focused hedge funds lead the table with returns of 2.53% and 2.11%, while Japan and Latin America investing funds are in the red–down 1.12% and 1.46%, respectively.

The Eurekahedge report notes that funds focused on Latin America have to weather significant headwinds following the Fed’s second round of QE trimming earlier this year. However, they have managed to outperform the MSCI Latin America Index by over 6% year-to-date.

The following graph highlights the returns across regions in January and February 2014:

Returns across regions

Robust performance by North American hedge funds

The Eurekahedge report highlights the robust growth experienced by North American hedge funds in 2013 with their AUM breaching the $1.3 trillion mark. Moreover, the region garnered almost 70% of the global hedge fund industry. The report highlights that as of January 2014, the total AUM of the region’s hedge fund industry stands at $1.35 trillion managed by over 5,122 hedge funds.

The following table captures the breakdown of North American hedge fund assets since 2010, based on monthly asset flows and performance-based growth/decline:

Monthly asset flows of NA region