Fri, Sep 22, 2017
A A A
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Industry Updates

HFR: Total hedge fund assets exceed $2.4tln, led by Event Driven strategies; number of hedge funds surpasses 10,000

Thursday, July 18, 2013
Opalesque Industry Update - Total capital invested globally in hedge funds increased to a record level for the fourth consecutive quarter in 2Q13, according to the latest HFR Global Hedge Fund Industry Report, released today by HFR, the established leader in indexation, analysis and research for the global hedge fund industry. The growth in assets in 2Q13 extended a streak of steady increases in hedge fund capital despite a surge in financial market volatility into quarter end.

Total hedge fund capital increased by a net total of $40 billion in 2Q13 to a record $2.41 trillion. Hedge funds that took in new capital saw inflows of $55.9 billion during the quarter, while funds that experienced redemptions booked outflows totaling $41.4 billion, resulting in a net inflow of $14.5 billion, which is in line with the 1Q13 inflow of $15.2 billion. Sixty percent of all hedge funds experienced net inflows for 2Q13 while forty percent experienced outflows. The first half 2013 inflow of $29.8 billion surpassed 1H inflows in 2012 ($20.4 billion) and nearly matched the full year 2012 total of $34.4 billion.

The total number of hedge funds increased to over 10,000 funds for the first time since 2006, at which time a record number of 10,096 funds existed.

As the quarter concluded with a sharp rise in bond yields and widening high yield credit spreads, investors exhibited a preference for credit and interest rate sensitive Event Driven and Relative Value Arbitrage strategies, with these receiving over $14 billion of combined inflows in 2Q and nearly $25 billion in inflows for 1H13. With contributions from high performing Activist strategies and a dynamic M&A and corporate actions environment, the HFRI Event Driven Index led other main strategy areas for both 2Q and 1H13, gaining +1.8 and +5.7 percent, respectively. Recent inflows represent a reversal for Event strategies, which experienced net outflows of $6.6 billion in 2012. HFRI Relative Value Arbitrage Index was the leading area of both performance and capital inflows in 2012, posting a gain of +10.6 percent and inflows of over $41 billion, increasing Relative Value Arbitrage to the largest strategy area of hedge fund capital. The HFRI RV: Yield Alternatives Index is the leading sub-strategy area of hedge fund performance for 2013, posting a YTD gain of +12.1 percent through June.

Investors allocated $3.6 billion of new capital to Macro strategies in 2Q13, despite the HFRI Macro Index posting a decline of -0.5 percent for 1H13. Investors withdrew net $1.3 billion from Equity Hedge strategies in 2Q13, partially reversing a similar inflow from 1Q13 and resuming the EH outflow trend from 2012. HFRI Equity Hedge Index gained +5.3 percent in 1H13, although sub-indices HFRI Sector: Technology/Healthcare and Fundamental Value gained +8.9 and +8.6 percent, respectively.

Positive capital inflows occurred across all fund sizes, with firms below $500 million in AUM experiencing combined inflows of approximately $2.4 billion. The industry’s largest firms, those in excess of $5 billion in AUM, experienced net inflows of $6.1 billion, while firms between $1 and $5 billion experienced inflows of $5.8 billion. Investors withdrew $4.6 billion from Funds of Hedge Funds in 2Q13, bringing FY13 FOF redemptions to $9.6 billion.

“Hedge fund performance and capital flow trends reflect the contrast between the strong equity gains of 1Q13 and the sharp increases in bonds yields to conclude 2Q13, as investors exhibited a preference for exposures to powerful M&A and Special Situations trends and long/short exposure to credit and fixed income strategies, while reducing directional equity market exposure,” stated Kenneth J. Heinz, President of HFR. “Hedge fund managers and investors continue to position for a post-QE environment dominated by fundamental, mean-reverting and trend-following factors, with these in contrast to the macro policy and stimulus-dominated environment of recent quarters. As this environment develops, and concurrent with relaxation of certain marketing restrictions on hedge funds, investor preferences for sophisticated, specialized long/short exposure to these shifting dynamics are likely to drive hedge fund industry growth in 2H13.”

Press release

www.hedgefundresearch.com

Bg

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. Asia - Hedge funds used to love shorting China. Now, not so much, Fledgling China FoFs require careful use: NCSSF, Amac, Japanese banks turn to PE, hedge funds for returns[more]

    Hedge funds used to love shorting China. Now, not so much From Bloomberg.com: A sharp devaluation. A credit crisis. And an economic hard landing. That's what some of the biggest names in the hedge fund industry were predicting for China after the nation's stocks and currency tumbled in 2

  2. Launches - Orchard launches new credit platform, ETN based on hedge fund to launch on the LSE[more]

    Orchard launches new credit platform Orchard Platform has rolled out Deals as a part of its new platform launch. With the addition of Deals to their suite of technology solutions for loan originators and institutional investors, Orchard Platform takes the next step in their evolution. De

  3. Neuberger Berman closes $1.1bn Credit Opportunities Fund[more]

    Neuberger Berman, a private, independent, employee-owned investment manager, announced that NB Private Equity Credit Opportunities Fund LP closed on $1.1 billion of limited partner commitments. The Fund seeks to invest in the secured and unsecured debt of private equity-backed companies, primarily i

  4. Capital Dynamics launches mid-market private credit business[more]

    Capital Dynamics, a global private asset manager, has launched a dedicated Private Credit Asset Management business. Experienced industry executives Jens Ernberg and Thomas Hall have joined Capital Dynamics to co-lead the company's new private credit initiative. They are based in Capital Dynamics' N

  5. ...And Finally - FAN-antic[more]

    From Newsoftheweird.com: Jeffrey Riegel, 56, of Port Republic, New Jersey, left 'em laughing with his obituary's parting shot at the Philadelphia Eagles. In it, Riegel asked that eight Eagles players act as pallbearers, "so the Eagles can let me down one last time." Riegel owned season tickets for 3