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Hedge funds see inflows after four months of redemptions

Wednesday, August 26, 2020
Opalesque Industry Update - Investors allocated an additional +$9.33 billion to hedge funds around the world in July, ending four consecutive months of redemptions that saw investors pulling some -$72 billion from the industry between March and June, according to the just-released eVestment July 2020 Hedge Fund Asset Flows report.

With new money coming into the industry in only three of the first seven months of the year, the industry is still in the red for asset flows year to date (YTD) by -$46.42 billion and industry AUM stands at $3.15 trillion.

Among primary strategies eVestment tracks, Multi-Strategy funds were among the big asset winners in July, with investors adding +$4.02 billion to these funds. This brings YTD asset flows to -$450 million, setting up Mutli-Strategy funds to be in the green for asset flows for 2020 if the trend continues. About 50% of Multi-Strategy managers saw inflows in July, with the largest inflows going to funds which performed well so far this year and last year.

Event Driven funds attracted only +$990 million in new money in July, but these funds are one of only two primary strategies in the green for asset flows so far in 2020. YTD, Event Driven funds have attracted $4.38 billion this year, on top of $11.06 billion in new money these funds attracted in 2019. The only other primary strategy eVestment tracks that is in the green for July and YTD are Convertible Arbitrage funds, which attracted +$440 million in July and YTD have seen +$800 million in new money.

Managed Futures funds saw significant interest in July, with investors adding +$2.96 billion to these funds. The inflows to Managed Futures funds were the largest since October of last year and 54% of Managed Futures funds saw new money. Managed Futures are still in the red for asset flows YTD at -$7.07 billion.

Macro and Relative Value Credit funds were also asset winners in July, pulling in +$2.78 billion and +$2.69 billion respectively.

Long Short Equity funds were the big asset losers among primary strategies in July, with investors pulling -$4.24 billion from these funds, bringing YTD flows to -$13.74 billion. The YTD negative flow is on top of a massive -$44.49 billion investors pulled from Long Short Equity funds in 2019 and another -$10.74 billion investors pulled from these funds in 2018. However, at total AUM of $728.15 billion, Long Short Equity funds are by far the largest primary strategy eVestment tracks.

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