In 2016, the financial press seemed convinced that the hedge fund industry as we know it, was dying a slow death. Asset flows data seemed to confirm this conclusion with the industry bleeding $100 billion of assets throughout the year. In the fourth quarter alone, investors redeemed a staggering $43.1 billion from hedge fund firms according to data provider Preqin.
However, according to the latest set of figures from hedge fund data provider Eurekahedge, it looks as if 2017 is shaping up to be one of the best years for some time for the industry as hedge fund firms attract new assets performance improves.
Hedge fund firms See Asset Growth
According to Eurekahedge's figures, during July 2017, hedge fund managers reported performance based gains of $16.5 billion while recording net asset inflows of $11.6 billion. Preliminary data for August shows a continuation of this trend with performance based gains of $9.7 billion and net inflows of $4.1 billion bringing the total value of assets under management for the global hedge fund industry to $2.37 trillion.
Year-to-date performance and flows figures are even more impressive. For the year to the end of August, hedge funds were up 5.12%, giving performance based gains of $58.5 billion and net asset inflows of $81.9 billion. Over the past eight months, hedge fund assets have grown by a staggering $140.5 billion, making up for all of last year's outflows and more.
Across the different mandates, arbitrage strategies have attracted the most investor attention with inflows of $14.6 billion, followed by long/short equities at $13.7 billion and CTA/managed futures strategies at $12.6 billion. However, investors have found no similar love for distressed debt managers who have posted the steepest year-to-date redemptions among strategic mandates, with $1.3 billion in outflows.
Regarding geographic mandates, North American funds recorded net asset inflows of $3 billion while posting performance-based gains of $6.9 billion during August. Net asset inflows to the region since the start of the year stands at $50.1 billion, while managers have posted performance-based gains of $36.5 billion.
Year-to-date, European hedge fund firms have seen performance-based gains of $11 billion while net inflows stood at $22.4 billion as Asian funds have recorded a growth in AUM of $13.6 billion, with US$9 billion accounted for by performance-based gains while the remainder has come through net investor allocations.
Billion dollar hedge fund firms have recorded year-to-date inflows of $46 billion while sub-billion dollar funds have recorded inflows of $35.9 billion YTD.