Hedge funds overcome summer slump
25 September 2014 London
Image: Shutterstock
Total assets in hedge funds increased 1.6 percent in August to $3.07 trillion, overtaking the all-time peak level set prior to July’s slight decline, according to eVestment’s latest report.
August’s asset increase of $49.6 billion came primarily from performance gains, but investors added an estimated $12.6 billion into hedge funds during the month.
Net flows for the industry have been positive in every month of 2014, according to the report, despite flows in June and July being below average. For the year, investors have added $114.7 billion of new capital to the industry.
The report stated: “Flows throughout 2014 are in part the result of institutional investor policy decisions made several months in advance. During this time, investors have witnessed meaningful global equity market directional shifts, US markets reaching all-time highs and a persistent presence of geo-political and sovereign risks.”
Traditional US equity strategies reporting to eVestment have experienced net outflows greater than $200 billion in both 2012 and 2013, and is on the same pace for 2014.
In the last two and a half years, institutional investors have removed nearly $600 billion of assets from US equity strategies.
Investor interest in equity strategies, with many event driven funds being among this group, has been the key driver of hedge fund allocations in 2014, according to eVestment.
Event driven funds have seen the largest inflows of any strategy during the year, as August’s inflow of $4.2 billion pushed the universe’s net inflows to $42.9 billion in 2014, surpassing long/short equity strategy inflows.
Flows into activist strategies were again strong in August, receiving just less than half of the total allocations to event driven strategies in August.
Investors allocated approximately $1.9 billion to activist funds in August and performance gains also lifted assets under management (AUM).
Total AUM in hedge funds reporting to eVestment, which may employ activist strategies, was near $93 billion at the end of August.
August’s asset increase of $49.6 billion came primarily from performance gains, but investors added an estimated $12.6 billion into hedge funds during the month.
Net flows for the industry have been positive in every month of 2014, according to the report, despite flows in June and July being below average. For the year, investors have added $114.7 billion of new capital to the industry.
The report stated: “Flows throughout 2014 are in part the result of institutional investor policy decisions made several months in advance. During this time, investors have witnessed meaningful global equity market directional shifts, US markets reaching all-time highs and a persistent presence of geo-political and sovereign risks.”
Traditional US equity strategies reporting to eVestment have experienced net outflows greater than $200 billion in both 2012 and 2013, and is on the same pace for 2014.
In the last two and a half years, institutional investors have removed nearly $600 billion of assets from US equity strategies.
Investor interest in equity strategies, with many event driven funds being among this group, has been the key driver of hedge fund allocations in 2014, according to eVestment.
Event driven funds have seen the largest inflows of any strategy during the year, as August’s inflow of $4.2 billion pushed the universe’s net inflows to $42.9 billion in 2014, surpassing long/short equity strategy inflows.
Flows into activist strategies were again strong in August, receiving just less than half of the total allocations to event driven strategies in August.
Investors allocated approximately $1.9 billion to activist funds in August and performance gains also lifted assets under management (AUM).
Total AUM in hedge funds reporting to eVestment, which may employ activist strategies, was near $93 billion at the end of August.
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