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Billions flow into hedge funds in August, nearly 60% of funds see new money

Thursday, September 24, 2020
Opalesque Industry Update - After a four-month string of asset outflows from hedge funds in March through June, hedge funds continued in asset-recovery mode in August, with investors adding $7.36 billion to the industry last month, according to the just-released August 2020 eVestment Hedge Fund Asset Flows Report. This follows on more than $9 billion added to hedge funds in July.

Year to date (YTD) the industry is still deeply in the red, with investors pulling some $37.59 billion from hedge funds so far this year. Overall industry AUM stands at $3.197 trillion.

eVestment Global of Research Peter Laurelli, the report's author, notes the volume of asset flows was light in August, but well disbursed, with a majority of the funds eVestment tracks seeing asset inflows.

"August was generally a broadly positive month for the hedge fund industry, though there were pockets of large redemptions clouding the picture," said Laurelli. "The proportion of funds with inflows was nearly 60%, which would make August 2020 the second most broadly positive month for hedge fund asset flows in the past five years."

Among major fund types, Fixed Income/Credit funds were big asset winners, pulling in +$2.97 billion in August, although these fund are still down -$6.36 billion YTD. Commodities funds were up +$1.47 billion in August and are up +$3.50 billion for the year.

Among the primary hedge fund strategies eVestment tracks, Macro funds saw the most new money in August, pulling in +$2.84 billion. These funds have a lot of ground to make up, however, as they are down -$13.26 billion YTD, on top of -$20.60 billion investors pulled from Macro funds in 2019.

Event Driven hedge funds are continuing a long-running winning streak. These funds saw +$1.75 billion in new investor money in August and are up YTD +$6.21 billion. This adds to just over +$11 billion investors added to Event Driven funds in 2019.

On the other hand, Long/Short Equity funds continued a long-running losing streak in August. Investors pulled -$1.88 billion from these funds in August, bringing YTD investor redemptions to -$12.36 billion. This is on top of a massive -$44.49 billion investors pulled from these funds in 2019 and a less dramatic but still meaningful -$10.74 billion investors pulled from Long/Short Equity funds in 2018.

While Multi-Strategy funds were just barely negative for flows in August, with investors pulling -$360 million from this sector, those outflows were highly concentrated in August and the majority of Multi-Strategy funds appeared to have inflows during the month.

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