Sun, Feb 14, 2016
A A A
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Industry Updates

Hedge funds haul in $34.9bn in February, heaviest inflows on record equity strategies 'wildly popular'

Monday, April 11, 2011

Vincent Deluard
Opalesque Industry Update - The hedge fund industry raked in $34.9 billion (2.0% of assets) in February 2011, the heaviest inflow on record, reports BarclayHedge and TrimTabs Investment Research. Industry assets stand at $1.73 trillion, the highest level since October 2008.

“Flows are doubtless following performance,” explains Sol Waksman, founder and President of BarclayHedge. “The Barclay Hedge Fund Index posted an increase in each of the past seven months, and it didn’t hurt that February is historically the best month of the year for new hedge fund subscriptions. Meanwhile, public pension plans — many of which are underfunded — are devoting much more capital to the hedge fund space.”

Meanwhile, the record inflow in February might bode ill for the performance of hedge funds in the next year. The increase in the Barclay Hedge Fund Index in the 12 months following an inflow of $25+ billion averages just 2.6%. In contrast, the average increase in returns in the 12 months prior to a $25+ billion inflow clocks in at a handsome 14.2%.

“Investors of all stripes tend to chase fat returns, and investment vehicles of all kinds tend to perform relatively poorly once everyone under the sun is enamored of them,” explains Vincent Deluard, Executive Vice President of Research at TrimTabs. “Inflows are historically heaviest when asset prices are dear, while some strategies constrain managers. There are only a handful of deals on which a merger arbitrage fund can capitalize.”

Funds of hedge funds hauled in $7.3 billion (1.3% of assets) in February, the heaviest inflow since March 2008, while commodity trading advisors (CTAs) raked in $7.5 billion (2.5% of assets), the heaviest inflow since June 2009. Meanwhile, hedge fund investors are exhibiting a stronger appetite for risk. All six equity hedge fund strategies received assets in February.

“Competitive currency depreciations, soaring commodity prices, disasters in Japan, revolution and war in the Middle East, and debt crises in Europe make for a tragic and bearish landscape,” notes Deluard. “Market participants nonetheless keep peppering equities with cash, and that might explain why market corrections have proven so shallow and brief.”

The TrimTabs/BarclayHedge database tracks hedge fund flows on a monthly basis. The TrimTabs/BarclayHedge Hedge Fund Flow Report provides detailed analysis of these flows as well as relevant topical studies. Click here for further information.

(press release)

Source

kb

What do you think?

   Use "anonymous" as my name    |   Alert me via email on new comments   |   
Today's Exclusives Today's Other Voices More Exclusives
Previous Opalesque Exclusives                                  
More Other Voices
Previous Other Voices                                               
Access Alternative Market Briefing


  • Top Forwarded
  • Top Tracked
  • Top Searched
  1. Investing - Real estate secondaries sole 'bright spot' in 2015, As hedge funds stumble, one firm prepares to buy illiquid stakes[more]

    Real estate secondaries sole 'bright spot' in 2015 From IPE.com: The secondary market for property was the sole “bright spot” over the course of 2015, as hedge fund secondaries saw deals fall by two-thirds, according to a wide-ranging survey of the market. Setter Capital said 2015 saw th

  2. Asia - Hedge fund manager Kyle Bass estimates China's foreign reserves below critical level[more]

    From Nasdaq.com: Investor Kyle Bass stepped up his attack on China's currency, arguing in an investor letter distributed Wednesday that the second-largest economy's foreign reserves are "already below a critical level." The comments mark the latest effort by hedge funds and other investors to raise

  3. Investing - Some hedge funds want to make subprime auto loans next big short, 11 hedge funds that are “all in” on the FANG stocks, Hedge funds short London luxury homes, Cynet raises $7 million from U.S. hedge fund[more]

    Some hedge funds want to make subprime auto loans next big short From Bloomberg.com: A group of hedge funds, convinced they have found the next Big Short, are looking to bet against bonds backed by subprime auto loans. Good luck finding a bank willing to do the trade. Money manage

  4. Investing - Hedge funds see selloff in European bank stocks as buying opportunity[more]

    From WSJ.com: The massive selloff in European bank stocks and bonds is overdone and presents a “phenomenal” buying opportunity, according to some of Europe’s top hedge-fund managers. Despite a 28% slump in European bank stocks this year, including a 38% fall in Deutsche Bank AG and a 34% drop in Soc

  5. Legal - Carlyle accused of fraud by ex-employee, Hedge funds win CDS breach of contract suit against Deutsche Bank, Hedge fund asks for OK on $27.5m Goldman CDO deal, SFO examines Barclays hedge fund profits[more]

    Carlyle accused of fraud by ex-employee From AI-CIO.com: A former portfolio manager claims he was fired for blowing the whistle on “crazy” and “irresponsible” investments. Carlyle Group has been sued by a former portfolio manager for one of its hedge funds, who accused the firm of “knowi