Opalesque Industry Update - eVestment|HFN announced the release of their August hedge fund industry report. The report shows that hedge funds posted their third consecutive month of positive performance in August returning an average of 0.7% and pushed aggregate performance to positive 4.1% for the year. Large funds, those with greater than $1 billion in AUM, posted an average return of 1.9%, their best month since January. Updated asset flow estimates point to elevated investor outflows in July, $11.8 billion, as total hedge fund assets touched $2.52 trillion.|
Data contained in the report is as reported to the proprietary evestment|HFN research dataset which includes more than 22,500 active and historical products and $1.7 trillion in strategy assets. eVestment’s combined research and traditional institutional datasets cover 53,200 products with more than $14 trillion current assets under management.
Credit Strategies Continued to Roll as Euro Strength Hurt Managed Futures Funds
“The low volatility rally in August, driven in part by verbal support for the Eurozone’s struggling sovereigns from the ECB, benefited long-biased equity exposures in August, but investors have not shown confidence in the space,” stated Peter Laurelli, CFA, head of eVestment Alliance’s industry research division. “Instead, there have been massive flows into credit strategies over the last seven months, nearly $23 billion, which has been rewarded with excellent returns.”
Mr. Laurelli adds, “Institutional investors across hedge funds and traditional managed accounts have actively reduced exposure to equity markets and increased exposure to credit related strategies throughout the year. This demand for yield and safety in credit markets has been a positive structural return driver.”
Large Funds Show Signs of Strength
“While August may not be representative of the remainder of the year, many of these firms have received large new allocations through the year and it is good for the industry for these strategies to show they are able to produce above average returns at times,” noted Mr. Laurelli.
Outlook for the Remainder of 2012