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Hedge fund capital increased by $80bn in Q4 to start 2020 at a record level of $3.32tn

Wednesday, January 22, 2020

Laxman Pai, Opalesque Asia:

Total hedge fund capital surged to $3.32 trillion, representing a quarterly increase of over $80 billion and surpassing the previous record of $3.24 trillion set in mid-2019.

Driven by investor optimism regarding the record US-lead economic surge, the hedge fund industry began the new decade at a record capital level as global equity markets surged into 2020, pointed out HFR, the global hedge fund industry researcher.

Capital flows across strategies were mixed with investors redeeming from fixed income-based Relative Value Arbitrage while allocating to Equity Hedge, the industry's largest area of strategy capital.

The overall industry suffered an estimated net asset outflow of $13.6 billion in 4Q, driven by $8.0 billion of outflows from Relative Value Arbitrage.

HFRI Fund Weighted Composite Index gains +10.4% 2019

Led by highest beta strategies, the HFRI Fund Weighted Composite Index advanced +3.5 percent for the quarter, bringing the 2019 gain to +10.4 percent, the strongest calendar year of performance since 2009.

The HFRI 500 Fund Weighted Composite Index, an investable index of 500 leading hedge funds, advanced +2.9 percent in 4Q and +9.7 percent for 2019.

Driven by strong performance gains, investors allocated an estimated $1.8 billion of new capital to Equity Hedge funds in 4Q, the industry's largest concentration of strategy capital.

The quarterly inflow to Equity represents the first inflow since 2Q18 an......................

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