Hedge fund asset flows negative in October
22 November 2018 London
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Hedge fund asset flows were reported negative in October as performance challenges have continued to be an issue, an eVestment report has revealed.
Investors removed an estimated $7.13 billion from the global hedge fund industry in October, which pushed year-to-date flows firmly negative at -$10.09 billion, the report found.
According to the report, the October outflows follow an uninspiring year in hedge fund performance, culminating in October performance numbers that saw almost all primary hedge fund markets and strategies in the red for the month.
Industry redemptions continued in October, and flows now firmly have a negative year-to-date (YTD).
Meanwhile, macro managers saw elevated redemptions in October, and managed futures redemptions continued, eVestment noted in their report.
Equity strategy flows were positive, though investors have shown preference for market neutral over directional strategies.
In the reports summary, eVestment stated: “Given that, historically, December has been a month where outflows are elevated even in otherwise positive years, it is highly likely that 2018 will end up as a year of net redemptions from the industry.”
“Since at least 2004, that has occurred only three other times, in 2008 and 2009 (though the latter was only due to outflows in Q1 2009) and again in 2016.”
It was also noted that: “Since Q4 2015, investors have removed a net amount of $121 billion from hedge funds. That said, there are products able to gain assets during these otherwise difficult times.”
It was added: “Investor allocations have shown that periods of positive results will not simply be rewarded, however consistency over longer periods consistently produces new allocations and the industry has many managers able to do just that.”
Investors removed an estimated $7.13 billion from the global hedge fund industry in October, which pushed year-to-date flows firmly negative at -$10.09 billion, the report found.
According to the report, the October outflows follow an uninspiring year in hedge fund performance, culminating in October performance numbers that saw almost all primary hedge fund markets and strategies in the red for the month.
Industry redemptions continued in October, and flows now firmly have a negative year-to-date (YTD).
Meanwhile, macro managers saw elevated redemptions in October, and managed futures redemptions continued, eVestment noted in their report.
Equity strategy flows were positive, though investors have shown preference for market neutral over directional strategies.
In the reports summary, eVestment stated: “Given that, historically, December has been a month where outflows are elevated even in otherwise positive years, it is highly likely that 2018 will end up as a year of net redemptions from the industry.”
“Since at least 2004, that has occurred only three other times, in 2008 and 2009 (though the latter was only due to outflows in Q1 2009) and again in 2016.”
It was also noted that: “Since Q4 2015, investors have removed a net amount of $121 billion from hedge funds. That said, there are products able to gain assets during these otherwise difficult times.”
It was added: “Investor allocations have shown that periods of positive results will not simply be rewarded, however consistency over longer periods consistently produces new allocations and the industry has many managers able to do just that.”
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