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
Intra-industry performance correlation declines
“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