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Investors generous with new money for hedge funds in February. Will that hold up in March?

Thursday, March 26, 2020
Opalesque Industry Update - Investors were bullish on hedge funds in February, allocating another $14.78 billion to funds around the world, according to the just-released February 2020 eVestment Hedge Fund Asset Flows Report.

February inflows bring YTD 2020 flows to +$21.96 billion. However, performance losses for the first two months of the year brought overall hedge fund industry AUM down by -1.95% to $3.245 trillion.

eVestment Global Head of Research Peter Laurelli said the dramatic disruptions in world economies as a result of the Coronavirus make it hard to discern real patterns or make predictions for the rest of the year - or even the rest of the quarter - given how much has changed in a few weeks.

"Having written about flow themes for several years, it becomes second nature to recognize patterns and attempt to put them in perspective," he says. "When the world shifts so significantly as it has in March, there is little historical perspective to try and understand what happens next."

As Laurelli noted earlier in the month, "This is a defining time for many managers. For some hedge fund managers this period will be a career maker."

Most primary hedge fund strategies tracked by eVestment were in the green for flows in February. Big flows winners were Multi-Strategy funds, pulling in another +$6.42 billion, and Long/Short Equity funds, pulling in +$5.04 billion.

Macro funds were the big asset losers among primary strategies in February, with investors pulling -$5.49 billion from these funds in February.

In terms of investment focus, funds focused on Global and Americas investments saw inflows. Global-focused funds pulled in +$10.29 billion in new money and Americas-focused funds pulled in +$4.96 billion.

Asia-domiciled funds were slightly in the red for flows, with investors pulling -$560 million from those funds. However, those redemptions were concentrated on a small number of funds and the majority of Asia-based funds were able to raise more money in February.

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