Sun, May 29, 2016
A A A
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Industry Updates

HFR: Hedge fund experienced net inflows of $9.5bn in Q2 as consolidation in top firms continues

Tuesday, July 20, 2010
Opalesque Industry Update - Investors continued to allocate new capital to hedge funds in the second quarter of 2010, with the industry experiencing a net inflow of $9.5 billion according to figures released today by Hedge Fund Research (HFR), the leading provider of hedge fund industry data. Volatility returned to global capital markets in 2Q10 with the HFRI Fund Weighted Composite Index posting a decline of -2.5 percent, offsetting 1Q10 gains. Total hedge fund industry capital ended the most recent quarter at $1.65 trillion, down from $1.67 trillion the prior quarter.

Following strong performance in 2009, hedge funds declined by -0.21 percent in 1H10, as gains in credit sensitive strategies such as Arbitrage and Event Driven were offset by losses in Equity Hedge and Macro funds. Capital inflows over 1H10 totalled $23.2 Billion, a figure approximately 20 percent of the record inflows in 1H07.

Large funds remain in favor; Fund of Funds outflows moderate
Continuing a recent trend, investors exhibited a clear preference for the industry’s most established firms in 2Q10, with $8.8 billion of the $9.5 billion total net inflow allocated to firms with greater than $5 billion in assets under management (AUM), which manage approximately sixty percent of total industry capital. This preference is also Hedge Fund Research reflected in the mid-quarter announced merger between two of the industry’s largest firms, Man Group and GLG Partners. Following outflows over the past two years, Fund of Funds experienced a continued, albeit moderated, outflow of $2 billion in the second quarter. Only 31 percent of Fund of Funds experienced inflows in 2Q10, compared to 59 percent of all single manager funds.

Intra-industry performance correlation declines
As global equity market correlation has increased in recent months, intra-industry hedge fund strategy performance correlation has declined; with the HFRI Relative Value Arbitrage and Event Driven Indices gaining +3.64 and +2.26 percent, respectively, for 1H10, while the HFRI Equity Hedge and Macro Indices declined by -1.71 and -1.16 percent. In the past five years, Relative Value and Event Driven have had correlations of +0.72 and +0.81 to equity markets, respectively.

“The current environment in the hedge fund industry continues to be dominated by investor preference for robust fund infrastructure, encompassing enhanced liquidity and transparency,” said Ken Heinz, President of Hedge Fund Research, Inc. “Investors have exhibited strong interest in products such as UCITS III-compliant funds and separately managed accounts, as well as in the larger funds in the industry. Further growth in transparent investment vehicles and greater clarity on global financial reform legislation will continue to shape the landscape of the alternative investment industry for the next decade.” Corporate website: Source

- FG

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. Americas - Australian banks sending U.S. hedge funds broke, Ryan Puerto Rico ‘rescue’ bill could be windfall for hedge funds[more]

    Australian banks sending U.S. hedge funds broke From SMH.com.au: US hedge funds are not having the best of years. Profits are hard to find, they're underperforming and the punters are losing patience, withdrawing US$15 billion ($20.8 billion) in the March quarter. They're expected to wit

  2. Investing - Billionaire Wilbur Ross likes the look of Chinese bad loans, Hedge funds are still relevant in a diversified portfolio: 4 fundamental criteria for superior manager selection[more]

    Billionaire Wilbur Ross likes the look of Chinese bad loans From Bloomberg.com: U.S. billionaire Wilbur Ross said he’s considering investing in nonperforming loans in China, as Moody’s Investors Service said that the nation has the tools to prevent a financial crisis in the near term. I’

  3. Investing - Blackstone gives pricey Canadian energy and property thumbs down, One of the most concentrated hedge fund bets is getting crushed, Facebook is hedge funds' new tech darling,[more]

    Blackstone gives pricey Canadian energy and property thumbs down From Bloomberg.com: Canada’s energy assets are uneconomic and real-estate markets overvalued, making them less attractive for investment than in the U.S. and elsewhere, according to Tony James, president of Blackstone Group

  4. Study - Only 30% of institutional hedge fund portfolios beat the benchmark[more]

    Bailey McCann, Opalesque New York: A new study from CEM Benchmarking, an independent provider of cost and performance analysis for pension funds, shows that only 30 percent of institutional investors hedge fund portfolios beat the benchmark after fees. The study provides in depth analysis of real

  5. Opalesque Exclusive: $1bn hedge fund club grows to 668 managers, continues to dominate (Part One)[more]

    Komfie Manalo, Opalesque Asia: Despite an underwhelming 2015 and a slow start to 2016 in terms of performance, one group of managers that continues to dominate the assets of the hedge fund industry is the so called $1bn club – hedge fund managers with at least $1bn in assets under management (AU