Fri, Nov 28, 2014
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. Unlucky Paulson & Co. rebrands $1.6bn Recovery Fund after 13% drop[more]

    From Businessweek.com: A maturing U.S. economic recovery is prompting Paulson & Co. to change course. The $19 billion hedge fund firm, led by billionaire John Paulson, told investors on a conference call this month that the Paulson Recovery Fund will be renamed Paulson Special Situations Fund on Jan

  2. Opalesque Roundtable: Islamic Finance races ahead with Sukuk, the first managed account platform, and foreign demand[more]

    Komfie Manalo, Opalesque Asia: A number of developments took place within Islamic finance in the past years, including the launch of a Islamic managed account platform and the further growth of the sukuk space that saw this instrument evolve from being a type of an ABS security that was rarely

  3. CTAs , event-driven strategies lead hedge funds recovery in mid-November[more]

    Komfie Manalo, Opalesque Asia: November’s performance proves to be in sharp contrast to the previous month, with equities further consolidating their upswing last week, according to the latest Lyxor Asset Management’s Weekly Brief. CTA funds als

  4. Fund Profile - A complex hedge fund strategy works for United Technologies[more]

    From Institutionalinvestor.com: Reports that portable alpha is dead have been greatly exaggerated, as Mark Twain might have phrased it. Another Connecticut Yankee, giant United Technologies Corp., is gearing up to grow its successful, nearly decade-long portable-alpha program. The UTC strategy took

  5. Opalesque Exclusive: The unintended consequences of Basel III[more]

    Benedicte Gravrand, Opalesque Geneva: Bijesh Amin, co-founder and managing director of Indus Valley Partners (IVP), a technology solutions and services firm focused on the alternative asset management industry, has recently observed