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Alternative Market Briefing

Hedge funds experienced a tough year, but AUM hits $4.1tn

Thursday, December 29, 2022

Laxman Pai, Opalesque Asia:

Hedge funds AUM stands at $4.1tn as of September 2022, which represents a 4.8% reduction since the end of 2021, said a study.

According to Preqin Global Report 2023: Hedge Funds, hedge funds experienced a tough year, but managed to bring value to portfolios. Hedge funds endured a tough first half as net capital outflows totaled $24.3bn, and the outflows continued in Q3 (-$31bn). The negative performance, along with the outflows, pushed the industry's total assets under management (AUM) down in 2022.

"Based on our last official estimate, AUM stands at $4.1tn as of September 2022, which represents a 4.8% reduction since the end of 2021," explained the report.

As of September, the asset class had declined by 9.3% (-12.2% annualized). The decline was not slight, but a deep dive into sub-strategies will help us understand how the industry truly performed.

CTAs outperformed other fund types and strategies, returning +8.2% as of September (11.1% annualized). Macro managers (+4.5% as of September, +6.1% annualized) also benefited from the market environment and movements in yields and commodities.

Relative value strategies (+0.2% as of September, +0.2% annualized) performed as expected and proved their worth to investors. Multi-strategy (-3.3% as of September, -4.4% annualized) and credit strategies (-5.2% as of September, -6.9% annualized) failed to produce positive numbers.

However, their performance is justified, as they t......................

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