Fri, Oct 21, 2016
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. M&A - U.S. hedge fund HarbourVest is shock winner in the £1.1bn SVG Capital takeover saga, Hedge fund Parvus shows hand, toppling William Hill merger deal[more]

    U.S. hedge fund HarbourVest is shock winner in the £1.1bn SVG Capital takeover saga From The fierce battle to buy Britain's biggest private equity group has come to an unexpected conclusion, with the original bidder walking away with the prize. SVG Capital has agreed

  2. Marc Lasry: Energy is still a phenomenal opportunity[more]

    From Distressed debt specialist Marc Lasry said energy debt is still a "phenomenal opportunity" because investors can get "massively overpaid" for the risk they take on. There are "huge opportunities" in the energy sector especially in restructurings, the Avenue Capital Group CEO said Tues

  3. Opalesque Exclusive: Ex-SAC manager re-emerges with market neutral hedge fund[more]

    Benedicte Gravrand, Opalesque Geneva for New Managers: A manager re-emerged from the SAC battleground last year to launch his own hedge fund under the umbrella of New York-based investment firm Endicott Group.

  4. North America - Hedge-fund manager Kyle Bass says the U.S. is on track for stagflation, Billionaire hedge fund titans Dinan, Lasry on election, markets and best investment ideas[more]

    Hedge-fund manager Kyle Bass says the U.S. is on track for stagflation From Kyle Bass, founder of Hayman Capital Management, on Wednesday warned that the U.S. is headed toward so-called stagflation. Stagflation is typically described as persistently high inflation and hi

  5. Macro hedge funds up 3.3% in one week on Fed and Brexit pays off[more]

    Komfie Manalo, Opalesque Asia: Hedge funds were boosted by the strong performance of global macro funds, with the Lyxor Global Macro Index gaining 3.3% as of the week ending Oct. 11 (-1.7% YTD), Lyxor Asset Management reported. Their short on the p