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The industry saw net inflows in February, but that has been the norm in February's data post-2009, said eVestment.

The level of net inflows would also appear to be nothing special as they were virtually identical to the average February net inflow over the past 11 years. But behind the aggregate data there is plenty to feel good about so far this year.

February's net inflow was the largest February in a few years and together with January's upward revision the industry has equaled its best start since 2014. It doesn't stop there, however. The breadth of success has also been excellent, a recurring theme since post-Q1 2020 (post-COVID onset), with the highest proportion of managers appearing to have net inflows since at least January 2016.

While most is well, all is not well. There have been some large redemptions clouding the otherwise positive sentiment for long/short equity managers, and inflows to macro managers feels more like a vote for future market uncertainty than for recent proof of being able to succeed in similar market environments. But let us bask in the known positives for the industry for at least one month.

Investors added an estimated $16.44 billion into hedge funds in February 2021, bringing YTD inflows to $23.74 billion. Performance was accretive to asset levels and total estimated industry AUM increased to $3.408 trillion.

In both good years and bad post-2009, net flow data for February has consistently been positive, and February 2021 is almost right on the mark of the prior 11-year average. There are, however, a few ways to look at the flow data for 2021 to highlight what appears to be a very positive start to the year.

While February tends to be positive, this February is the best since 2015 and when combined with updated data for January showing a stronger than first indicated start to the year, net inflows YTD are on par with the highest levels seen since 2014, roughly the same as 2018.

Reported data indicates over 60% of funds had net inflows in February following about 50% in January, which means the incoming assets are being relatively widely distributed. That's a continuation of a theme which emerged post-COVID onset, and it is a good thing.

Net inflows for multi-strategy funds in 2021 are just about where they were at this point in 2020, and where they were in 2019. Both those years ended up being negative, but barring something unexpected (though frankly the unexpected has begun to feel far too familiar recently), this year feels different.

Net flows for long/short equity hedge funds are negative YTD, which follows a few years of net outflows. It could seem that 2021 is just another year where investors are saying they're not interested in adding assets to the space, but that's not the case.

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