Komfie Manalo, Opalesque Asia: Global hedge fund assets increased in the second quarter of 2016, recovering the decline from the prior quarter and rising above the year-end 2015 level to reach the 3rd highest quarterly capital total on record, according to the latest HFR Global Hedge Fund Industry Report, released by HFR.
The industry navigated volatility and dislocations related to Brexit in late 2Q to post asset gains for both 2Q and 1H16. Total hedge fund capital rose to $2.898tln as of June 30, an increase of $42.06bn during the quarter, as the HFRI Fund Weighted Composite Index gained +2.0% in 2Q (+1.36% YTD).
"Hedge fund industry growth accelerated in 2Q, posting the strongest quarterly asset growth since the first quarter of 2015, driven by strong quantitative CTA gains on Brexit Friday and broad-based industry wide gains across equity, commodity and currency markets pursuant to the Brexit dislocations," stated HFR president Kenneth J. Heinz.
The current capital level was only surpassed in 1Q15 and 2Q15, at which time capital peaked at a record $2.969tln, before falling into year-end 2015. Investor redemptions declined to $8.2bn in 2Q16, decreasing by nearly half of the $15.1bn outflow in the prior quarter, though 2Q represents the 3rd consecutive quarterly outflow for the hedge fund industry.
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