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Hedge Funds See Net Outflows Of $14.3bn In Q1

Hedge Funds See Net Outflows Of $14.3bn In Q1 by Preqin

CTAs and multi-strategy funds are only leading strategies to see net inflows.

The hedge fund industry saw net outflows of investor capital in Q1 2016, totalling $14.3bn. This continues from the $8.9bn overall net outflows that funds recorded in Q4 2015, and is in contrast to the $28.8bn that the industry gained in investor capital in the same period last year. Overall, the total assets under management held by hedge funds globally fell 0.48% in the quarter, to stand at $3.13tn at the start of Q2.

Hedge Funds

Hedge Funds – Other Key Q1 2016 Asset Flow Facts:

  • Asset Flows by Strategy: CTAs and multi-strategy funds were the only strategies that saw net inflows, gaining $13.7bn and $12.8bn respectively. Equity strategies funds saw net outflows of $9.7bn in the quarter, while credit strategies funds saw the largest outflows of $11.9bn.
  • Outflow Predictions for 2016: Preqin’s survey of investors in November 2015 found that more investors (32%) plan to reduce their exposure to hedge funds in 2016 than plan to increase it (25%). This is the first time this has been seen since Preqin started tracking this data in 2009.
  • Investor Allocation Plans: Preqin’s survey of investors also revealed that 29% of investors planned to increase their exposure to CTAs in 2016, among the highest proportion of any leading strategy. Only 8% of investors planned to increase their exposure to credit strategies funds, the lowest of any leading strategy, compared with 15% that planned to decrease their exposure.
  • Asset Flows and Performance: 2015 performance correlates strongly with the net flows of assets in Q1. Of those funds which returned more than 5.00% in the year, 53% saw net inflows in Q1, while only 36% saw net outflows. By contrast, only 25% of funds which returned less than -5.00% in 2015 saw Q1 inflows, while 53% saw net outflows.
  • 12-Month Asset Flows: Over the past four quarters, multi-strategy and CTA funds have seen the largest net inflows, gaining $28.1bn and $27.0bn respectively. Macro strategies have seen the largest net outflows, losing $28.8bn in investor capital. Event driven, macro, relative value and credit strategies funds have all seen net outflows in three of the past four quarters.