Bailey McCann, Opalesque New York:
August was a positive month for the hedge fund industry, even though returns were down, hedge funds outperformed the S&P500 overall, and saw their best month yet for asset raising. According to eVestment, inflows totaled $19.6bn in August – the largest on record this year. Equity strategies were sector leaders for the second consecutive month followed by credit, while macro flows continued to underperform.
Performance losses reduced AUM by $20.8bn (-0.78%), resulting in a very slight monthly decline of overall industry AUM to $2.688tn. Equity strategies have seen the most investor interest over the last three months, and data shows that the last time equity exposure was this positive was just prior to the height of the European financial crisis.
"From September 2010 to June 2011, investors
added net $33.1 billion to equity strategies. In the ensuing six
months, performance losses reduced AUM by $41.7 billion
spurring a redemption cycle which lasted until Q2 2013," writes Peter Laurelli, VP and Head of Research, eVestment in the report.
August saw positive flows for credit strategies, which indicates that the recent shift in UST rates has not materially impacted perceived opportunity for further gains from the group. While flows for the MBS group remain slightly negative over the past three months, interest in directional credit rebounded from July.
Of funds with greater than $1bn in AUM entering August, 59% had ne......................
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