Tue, Dec 1, 2015
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Industry Updates

Hedge Fund Investors Rotate Into Macro Arbitrage Strategies For 2012, AuM Now at $2.01tln: HFR

Thursday, January 19, 2012
Opalesque Industry Update - Total capital invested in the hedge fund industry regained the $2 trillion milestone to conclude 2011, according to data released today by HFR (Hedge Fund Research, Inc.), the leading provider of data, indices and analysis of hedge funds. The industry originally eclipsed $2 trillion in AUM in 1Q11 and peaked at $2.04 trillion at mid-year before declining to $1.97 trillion to end the volatile 3Q11. Total hedge fund AUM finished the year at $2.01 trillion, as 4Q11 performance gains offset a nominal net capital outflow of $127 million, a figure representing approximately 0.007% of total industry AUM. For the full year 2011, investors allocated $70 billion of net new capital to hedge funds, a volatile performance year in which the HFRI Fund Weighted Composite Index declined by -5.0 percent, only the 3rd calendar year decline since 1990.

Macro, Arbitrage lead strategy allocation divergences

Investors exhibited a clear preference for Macro and Relative Value Arbitrage strategies in both the fourth quarter and the full year, while equity strategies experienced net withdrawals for 4Q. Discretionary and quantitative Macro hedge funds, which actively position across liquid currency, commodity, fixed income and equity markets experienced net inflows of $7.9 billion for 4Q and $27.9 billion for 2011. Relative Value Arbitrage (RVA) strategies, which are primarily fixed income-based, attracted a net inflow of $5.9 billion in 4Q and $35.9 billion for 2011; RVA was the only main strategy to post a performance gain for 2011, with the HFRI Relative Value Index gaining +0.51 percent for the year. Following the difficult 3Q11, Equity Hedge and Event Driven experienced net outflows in 4Q11 of $8.6 and $5.3 billion, respectively, reducing full year inflows to $2.2 billion in Equity Hedge and $4.6 billion in Event Driven.

Nearly 60 percent of all hedge funds experienced outflows for the quarter, while just over 40 percent attracted inflows. For the full year 2011, investors allocated $50.7 billion of net new capital to firms with greater than $5 billion in AUM, while firms with less than $5 billion experienced a combined net inflow of $20 billion. Concluding a difficult year for Funds of Hedge Funds (FOF), investors withdrew $7.2 billion in 4Q11, bringing FOF total capital to $629 billion.

"Capital flows in both 4Q and 2011 have followed a consistent theme of reducing directional equity market beta while increasing exposure across currency, commodity and fixed income strategies, as investors position for continuing macro volatility and spread convergence in 2012," said Kenneth J. Heinz, President of HFR. "The complexity and breadth of the European debt and currency crisis contributed to a challenging environment for hedge funds in 2011 and, as a result, investors are tactically positioning exposures to provide positive portfolio optionality and to monetize opportunities created by fluid developments in this ongoing crisis."

Press Release

HFR (Hedge Fund Research, Inc.): Source


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. David Einhorn's hedge fund plunged 5.2% in November, set for 2015 loss[more]

    From Bloomberg.com: David Einhorn’s main hedge fund at Greenlight Capital fell 5.2 percent in November and is poised for only its second losing year in almost two decades. The losses bring the fund’s yearly drop to almost 21 percent, according to an e-mail sent to clients that was obtained by Bloomb

  2. Other Voices: Hedge fund marketing and the selling cycle[more]

    By Bruce Frumerman. How long is the selling cycle now? That’s a question my financial communications and sales marketing consulting firm has been asked on a regular basis by hedge fund firm owners and sales people, ever since we opened the doors to our firm in 1987 pre-crash. Wa

  3. People - Solus Alternative Asset Management adds chief strategist from BTIG[more]

    From PIonline.com: Daniel Greenhaus joined hedge fund manager Solus Alternative Asset Management as managing director and chief strategist. He will work closely with Chris Bondy, Solus’ chief economist, managing director and executive vice president, said Chris Pucillo, CEO and chief investmen

  4. Commodities - Stung by oil, distressed-debt traders see worst losses since '08[more]

    From Bloomberg.com: It’s mid-November, but for investors who trade in the debt of distressed companies, the year’s already done -- and they lost. Hedge funds that specialize in the debt are grappling with their worst declines in seven years. Funds managed by Knighthead Capital Management, Candlewood

  5. Regulatory - Major changes in partnership audit procedures contained in 2015 Budget Act[more]

    Contained in the Bipartisan Budget Act of 2015, signed by President Obama on November 2, is a rather complex provision that materially changes how partnerships are audited. Generally effective for tax years beginning after December 31, 2017, the so-called “TEFRA” and “Electing Large Partnership” rul