Opalesque Industry Update - Despite hedge funds returning 7.40% over 2016, investors continued to withdraw capital over the year; the industry
saw overall net asset outflows totalling $110bn in 2016. Preqin's latest research finds that the rate of redemptions
accelerated through the year, from net outflows of $14bn in Q1 to $43bn in Q4 2016. Every leading hedge fund
strategy recorded net outflows for the year: by contrast, CTAs recorded annual net inflows of $26bn despite lacklustre
performance. Although there have been widespread redemptions across the industry, there is a clear link between
past performance and recent asset flows, with the best performing funds in 2015 and H1 2016 being the most likely to
see net inflows in Q4 2016. Other Key Hedge Fund Asset Flow Facts:
"Investors continued to withdraw capital from the hedge fund industry over 2016, as concerns around performance and fees grew, despite the Preqin All-Strategies Hedge Fund benchmark recording its highest gain in three years. In total, hedge funds recorded outflows of $110bn in 2016; however, CTAs recorded net inflows of $25bn, as investors rebalanced in favour of these strategies at the start of the year. With performance at the forefront of investors' minds in 2016, Preqin's data shows that those funds that posted superior performance in 2015 and the first half of 2016 saw greater inflows than funds which made smaller gains. Therefore, as we move forwards in 2017, it is likely that investors will continue to scrutinize the returns of funds, and are likely to continue to withdraw money from funds that have failed to meet their own individual or benchmark returns." |
Industry Updates
Hedge fund investor redemptions accelerate through 2016
Friday, February 17, 2017
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