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Hedge fund business AUM drops below $3tn for first time since 2014

Friday, April 24, 2020
Opalesque Industry Update - Investor redemptions and performance declines during this unprecedented time of market volatility pulled the hedge fund industry's assets under management below $3 trillion for the first time since April 2014, according to the just-released eVestment March/Q1 2020 Hedge Fund Asset Flows Report.

Industry AUM now stands at $2.949 trillion, according to the new report. In March, investors pulled $24.13 billion from the hedge fund business, erasing positive allocations in January and February and bringing year to date (YTD) flows to -$7.95 billion.

"The dust has nowhere near settled on the COVID-19 crisis, but hedge fund data is beginning to tell the story of how the industry may emerge," says eVestment Global Head of Research Peter Laurelli. "However this continues to play out, data so far indicates the industry is persevering, though absolutely not unscathed."

AUM outflows were the norm in March among almost all hedge fund strategies eVestment tracks. However, Relative Value Credit funds pulled in +$1.73 billion in March, bringing YTD inflows to +$3.69 billion. Event Driven funds were essentially flat in AUM in March, but are in the green YTD with inflows of +$2.84 billion.

Some other highlights from the new report include:

Managed Futures funds saw the most outflows among primary hedge fund strategies eVestment tracks, with investors pulling -$6.87 billion from these funds in March. Macro funds were a close second in outflows among primary strategies, with investors pulling -$6.49 billion in March. Both Managed Futures and Macro funds are also in the red for YTD flows at -$7.44 billion and -$12.93 billion respectively.

Multi Strategy funds also saw large outflows, at -$5.53 billion. However, Multi Strategy funds are still in the green for YTD flows at +$3.27 billion.

Funds focused on Global Markets were big asset losers in March, seeing outflows of -$23.41 billion. Funds focused on Europe, Asia and Emerging Markets also saw outflows in March, though on a much smaller scale, while funds focused on the Americas pulled in +$1.90 billion last month.

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