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Hedge fund lose 3% of assets through outflows in 2019, much less than long equity

Thursday, January 23, 2020
Opalesque Industry Update - The global hedge fund industry saw outflows of -$97.93 billion in 2019, according to the just-released December/Year-End 2019 eVestment Hedge Fund Asset Flows report.

Despite these redemptions, total hedge fund industry AUM rose past $3.3 trillion at the end of the year due to performance gains, according to the new eVestment report.

December 2019's outflows of -$16.21 billion capped off a tough year for the industry, which saw most fund-types and strategies in the red or essentially flat for December and/or for the full year.

However, the 2019 full-year hedge fund outflows of nearly -$100 billion represent less than 3% of total industry AUM. And to further put these figures in perspective, active long-only US equity strategies report about $7.1 trillion in AUM to eVestment, more than double the size of the hedge fund industry.

Through only Q3 in 2019 (the most current data eVestment has available for traditional strategies), this universe has seen redemptions of more than -$350 billion, over 5% of its AUM.

So while hedge fund redemptions have been elevated in 2019, according to the report, the hedge fund industry is not alone in feeling redemption pressure, nor is it near the top in terms flow amounts or percentages.

Among primary strategies tracked by eVestment, Long/Short Equity funds were the big asset losers in 2019, with investors pulling -$45.61 billion from these strategies. In December, investors pulled -$3.90 billion from Long/Short Equity strategies.

Coming in second for investor redemptions in 2019 among major strategies were Multi Strategy funds, which saw -$21.19 billion pulled by investors in 2019 (with -$7.68 billion pulled in December).

Macro funds were big asset winners among primary strategies in December, with investors adding +$3.87 billion, but these funds are still down -$18.42 billion for the year.

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