Opalesque Industry Update - Assets held by hedge funds globally reached a record $3.22tn as of the end of November 2016, according to Preqin’s 2017 Global Hedge Fund Report. Investor outflows through the year totalled $102bn, and at the end of the year, a record 66% of hedge fund investors said their hedge fund portfolios had fallen short of their expectations. However, 2016 also marked the best performance year for the industry since 2013, posting gains of 7.40%. This offset net investor outflows to drive total industry AUM past $3.2tn, a record high.
Key Findings from the 2017 Preqin Global Hedge Fund Report
Amy Bensted, Head of Hedge Fund Products: “Hedge fund managers are likely to remember 2016 as a difficult year for the industry. Investor outflows started at the end of 2015 and continued across the year: in total, net investor redemptions exceeded $100bn. Furthermore, some of the largest investors in the world are among those that have withdrawn capital from the industry, with the dual issues of performance and fees leading the concerns they have voiced. However, it was not all bad news for the industry; hedge funds added their largest gains since 2011, which boosted assets under management to record levels. In addition, some strategies have largely been spared the wave of redemptions, with CTAs recording inflows of $17bn as investors sought diversified and non-correlated products amid rising market volatility. Looking ahead, 2017 does not seem likely to prove any less challenging for fund managers; hedge funds will need to continue to perform well in in difficult markets, and address issues over fees in order to win back the growing group of investors sceptical of the value of the asset class.”
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Industry Updates
Hedge fund industry surpasses $3.2tn in 2016
Tuesday, January 31, 2017
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