Thu, Oct 28, 2021
A A A
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Industry Updates

Good news continues for hedge funds as 2021 performance, flows remain strong

Thursday, June 24, 2021
Opalesque Industry Update - Nearly half-way through 2021, the global hedge fund business continues to see strong performance and asset flows, with performance gains and new money boosting the industry to a new record $3.57 trillion AUM, according to eVestment's just-released May 2021 Hedge Fund Asset Flows report.

May's hedge fund performance average of +1.48% brought year-to-date (YTD) hedge fund average performance to +9.05%, just two digits shy of the +11.05% industry average for all of 2020. Barring any major unforeseen market, natural or geo-political disasters - or pandemics - the hedge fund business this year is poised to outperform 2020 by a wide margin.

Event Driven - Activist hedge funds are big performance winners so far this year, returning +2.02% in May and an impressive +26.30% YTD. India-focused hedge funds had the strongest May performance among all fund types eVestment tracks, at +9.44%, which brings these funds' YTD average performance to +23.12%.

Across the board, most fund types eVestment tracks were positive for performance in May, with the exception of FX/Currency funds, which returned an average of -0.20% in May and are at -2.18% YTD, and the 10 largest Long/Short Equity funds, which returned -0.24% in May and are just barely positive, at +0.44%, for the year.

Investors are rewarding the hedge fund business' performance with billions in new money. Investors added +$12.01 billion to the global hedge fund business in May, bringing YTD new AUM to +$39.12 billion and helping push the business to the aforementioned record $3.57 trillion in assets. Inflows have been widespread as well, with 62% of hedge funds reporting to eVestment seeing new money, the highest percentage seeing net inflows since May 2016.

The big flows winner in May were Multi-Strategy hedge funds, which pulled in +$4.49 billion in new money. "Net flows for these funds have been positive in seven of the past eight months," said eVestment Global Head of Research Peter Laurelli. "And at +$20.06 billion YTD, this segment easily has seen more money come in on a net basis in 2021 than any other general strategy."

Macro funds are also seeing strong demand, pulling in +$3.48 billion in May, bringing YTD flows to +$5.62 billion. For the year, the story for Macro funds has not been as strong as Multi-Strategy funds, but is overall positive, said Laurelli. "Money began to come in to Macro funds toward the end of 2020 and except for a blip of outflows in March, the segment is seeing healthy allocations."

Long/Short Equity funds are one major outlier in May's data, with investors pulling -$1.19 billion from these funds. YTD these funds have seen investors pull -$9.40 billion. However, Laurelli notes that these redemptions are largely concentrated among a handful of Long/Short Equity funds that have underperformed and that the picture for the wider Long/Short Equity fund universe is more positive.

What do you think?

   Use "anonymous" as my name    |   Alert me via email on new comments   |   
Today's Exclusives Today's Other Voices More Exclusives
Previous Opalesque Exclusives                                  
More Other Voices
Previous Other Voices                                               
Access Alternative Market Briefing

 



  • Top Forwarded
  • Top Tracked
  • Top Searched
  1. Institutional Investors: Vanderbilt University endowment records 57.1% return for fiscal year, MIT endowment logs 55.5% return for latest fiscal year, AP1 re-tenders $720m emerging markets small-cap mandate, Harvard, world's wealthiest university, sees endowment soar to $53.2bn, San Francisco shifts passive equity mandate to active BlackRock ESG strategy[more]

    Vanderbilt University endowment records 57.1% return for fiscal year From PIonline.com: Vanderbilt University's endowment returned a net 57.1% in the fiscal year ended June 30, according to a financial report on the Nashville, Tenn.-based university. The report did not provide benchma

  2. New Launches: Massar Capital launches new global discretionary strategy, White Oak closes latest direct lending fund at $1.3bn, Aterian replicates speedy fundraise to collect $830m in nine weeks, Sofinnova holds $548m final close for Capital X, Multicoin Capital targets $250m for third crypto VC fund, Tobam launches French bitcoin and blockchain fund[more]

    Massar Capital launches new global discretionary strategy Massar Capital Management has launched a new discretionary macro hedge fund strategy which aims to capitalize on directional trading opportunities across a broad set of global markets. The Massar Macro Directional is the N

  3. How Viking Global became the hedge-fund industry's hottest launch pad[more]

    From Business Insider: Since Dan Sundheim's massively successful launch of D1 Capital in 2018, there have been six more spinoffs from Viking Global that have collectively raised billions - and at least one more is in the works. Among them: Grant Wonders, 31, who launched Voyager Global this ye

  4. PE/VC: Moody's warns of 'systemic risks' in private credit industry, Sequoia to restructure itself away from traditional VC model, Modeling private equity market beta, VC investors pour money into Chinese start-ups despite regulatory crackdown[more]

    Moody's warns of 'systemic risks' in private credit industry From FT: The burgeoning private credit industry of lending to buyout groups has grown to about $1tn, but opacity, eroding standards and the difficulty in trading these slices of debt pose "systemic risks", according to rating

  5. PE/VC: Private equity M&A frenzy has cautious undertones, Venture capital exit values soar, Private equity and venture capital drove outsized returns at Bowdoin, Harvard, and the University of Pennsylvania, Private equity tops explosive tech growth as returns rocket[more]

    Private equity M&A frenzy has cautious undertones From Reuters: Private equity dealmakers are in two minds. Buyout barons, led by titans like Blackstone boss Steve Schwarzman, are on track for a record year for takeovers. Yet they're also offloading companies at a much faster pace than