Investors Add $1.19 Billion to Hedge Funds in January; AUM Now $3.033 Trillion; Multi-Strategy Funds Win Big

Jan 21 2015 | Peter Laurelli – evestment.com

Investors Add $1.19 Billion to Hedge Funds in January; AUM Now $3.033 Trillion; Multi-Strategy Funds Win Big

eVestment’s just-released January 2015 Hedge Fund Asset Flows Report shows the industry continuing to attract assets, gaining $1.19 billion during the past month. While some sectors saw large redemptions, other sectors, like multi-strategy funds and managed futures funds, saw large asset inflows. A few key points from the report are below:

• Total hedge fund assets increased 0.22% in the first month of 2015 bringing the industry’s total asset under management to $3.033 trillion based on asset inflows and performance gains.
• Investors added $1.19 billion in net new money into hedge funds during the month.
• Multi-strategy hedge funds continued their trend of being a primary driver of new assets coming into the hedge fund industry. The universe received $5.0 billion in new assets in January, their best start to a year since before the global financial crisis.
• Managed futures funds were another big winner in January. January’s estimated inflow for managed futures funds of $3.9 billion will likely stand as their largest monthly inflow since February 2012 and second largest since pre-financial crisis.
• January flows showed a continuation of the redemption pressures on funds with equity and credit exposures, but for different reasons. Long/short equity funds experienced their largest outflow of money since December 2009, losing $7.3 billion. Flows were at a similarly elevated level just one month prior to end 2014.
• The trend of outflows facing the European hedge fund industry continued into its seventh consecutive month in January. Redemptions came from funds across multiple strategies, but it appears exposure to European markets was among the main drivers of redemptions.
• Disappointing performance appeared to be the driver of redemptions from long/short equity strategies in January. Sixty-five percent of long/short equity funds had negative returns in the second half of 2014, but these funds accounted for 96% of all net outflows from the strategy in January.