Wed, Aug 21, 2019
A A A
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Industry Updates

Hedge funds reverse two-month redemption trend in May

Thursday, July 18, 2019
Opalesque Industry Update - Hedge funds reversed a brief two-month redemption trend in May with $800 million in industry inflows, a turnaround from April's $9.4 billion in redemptions.

While the fund flow needle turned upward in May, the month's inflows represented a negligible portion of industry assets, according to the Barclay Fund Flow Indicator published by BarclayHedge, a division of Backstop Solutions.

Strong U.S. economic indicators, an equity market rally that saw the S&P 500 making up ground lost in late 2018 and four consecutive profitable months for hedge funds was enough to overcome the redemption impact of Brexit worries and worries over an economic slowdown elsewhere in the world.

Data from the nearly 6,000 funds (excluding CTAs) included in the BarclayHedge database showed flow activity evenly mixed among regions of the world in May. The $10.6 billion in inflows to hedge funds in the U.S and its offshore islands, 0.7% of assets, went a long way toward offsetting the impact of $7.5 billion in redemptions in Continental Europe, 1.1% of assets, and $5.8 billion in May outflows, 1.0% of assets, in the U.K. and its offshore islands.

"An equity market rally coupled with strong U.S. economic news - highlighted by first quarter economic growth exceeding expectations - drove U.S. hedge fund investment and tipped the global balance toward hedge fund inflows in May," said Sol Waksman, president of BarclayHedge. "That said, ongoing Brexit concerns and downward revisions of economic growth projections in Europe and China drove redemptions in other regions of the world."

For the 12 months ending May 31, the hedge fund industry saw $151.0 billion in redemptions, 5.0% of industry assets.

While redemptions remained the norm for most hedge fund sectors over the 12-month period ending May 31, three sectors did post net inflows for the period. Macro funds experienced $15.6 billion in inflows, 7.6% of assets, over the 12 months, while Event Driven funds took in $9.9 billion, 6.9% of assets, and Merger Arbitrage funds added nearly $902 million, 1.4% of assets.

Investor concerns with regard to continued Fed tightening and doubts about whether the 10-year long bull market in equities was coming to an end continued to be reflected in the redemption trends of several sectors. Equity Long/Short funds experienced $31.1 billion in outflows, 13.9% of assets, Fixed Income funds saw $28.1 billion in redemptions, 4.9% of assets, Balanced (Stocks & Bonds) funds saw $27.8 billion in outflows, 11.3% of assets, and Equity Long Bias funds saw 12-month redemptions totaling $25.8 billion, 8.0% of assets.

For managed futures funds the redemption trend extended to 11 months in May. The month's redemptions stood at $3.8 billion, 1.2% of assets, up from $400 million in April outflows. For the 12-month period ending May 31, managed futures funds experienced $17.7 billion in redemptions, 4.8% of assets.

What do you think?

   Use "anonymous" as my name    |   Alert me via email on new comments   |   
Today's Exclusives Today's Other Voices More Exclusives
Previous Opalesque Exclusives                                  
More Other Voices
Previous Other Voices                                               
Access Alternative Market Briefing

 



  • Top Forwarded
  • Top Tracked
  • Top Searched
  1. Regulatory: Coming to America: US instigates major study into Mifid II[more]

    From IR Magazine: In the latest impact of Mifid II coming to America, a major investigation concentrating on research for small issuers has been successfully instigated by US politicians, on the back of the US coming closer to the European regulation. The US lower House of Congress, the House o

  2. Study: Quantitative investment strategies: Theory vs practice[more]

    From All About Alpha: When pitching an investment product with a backtested history the frequent response from potential investors is that they have never seen a bad backtest. Naturally this is true as there is no point in marketing a strategy with a poor backtest as investors have zero interest in

  3. 6 out of 10 investors seek to move assets from UK amid brewing of perfect storm[more]

    Opalesque Industry Update - Six out of 10 investors are now actively seeking to move assets out of Britain as a perfect storm looks set to hit the UK economy, reveals a new poll. The survey of more than 740 clients carried out by deVere Group, one of the world's largest independent financial

  4. Investing: Hedge funds take record short bets against Aston Martin, Investor sentiment reaching reversal point, says Lipper,It's time to buy into this long-suffering strategy, Investors, 'starved for returns,' flood private markets in search of high-growth opportunities[more]

    Hedge funds take record short bets against Aston Martin From FT: Hedge funds have taken record short positions in the debt and equity of Aston Martin, betting that the luxury carmaker will continue to struggle after one of the most disastrous stock market debuts of recent years.

  5. Crayhill Capital Management closes $100M transportation financing in Mexico[more]

    Bailey McCann, Opalesque New York: Private credit shop Crayhill Capital Management is providing a senior secured credit facility of up to $100 million to Mutuo Financiera, a vehicle fleet leasing company focused on clean energy passenger transportation in Mexico. Crayhill Capital Management is l