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Industry Updates

December outflows dampen hedge fund AUM growth, 2021 still first positive flows year since 2017

Friday, January 21, 2022
Opalesque Industry Update - Investors pulled $19.96 billion from the global hedge fund business in December, bringing full-year 2021 hedge fund AUM growth to +$15.90 billion, according to the just-released eVestment December and Full Year 2021 Hedge Fund Asset Flows report. Overall AUM for the hedge fund business closed out 2021 at $3.633 trillion in a generally strong year for hedge fund performance and AUM growth.

"While December's outflows did significantly minimize the hedge fund industry's overall 2021 apparent success, this year still goes down as the first year of net inflows since 2017 and second since 2015," said eVestment Global Head of Research Peter Laurelli. "It was a good year for the industry. Just not as good as it seemed it was going to be."

Multi-Strategy funds were the biggest asset losers in December, with investors pulling -$7.41 billion from these funds. For all of 2021, these funds pulled in +$20.83 billion in new money. Laurelli notes the overall picture for Multi-Strategy funds is a bit clouded.

"December's net outflow from Multi-Strategy funds is the result of an ongoing isolated capital shift within one of the universe's largest firms," he said. "Were that influence to be removed from December's data, the results would show another month of net inflow for Multi-Strategy funds. Regardless, the universe led the industry in 2021 for net inflows, its first annual net inflow since 2015."

Macro funds saw a big December fund-raising rally, pulling in +$2.48 billion in new money. These funds are still negative for AUM growth for the year, at -$4.17 billion.

Market Neutral Equity funds also saw strong inflows of +$1.76 billion and ended 2021 with net inflows of +$3.44 billion.

Investors pulled -$1.47 billion from Managed Futures funds in December, but with full year inflows of +$13.18 billion, Managed Futures funds saw the second largest annual inflows (behind Multi-Strategy funds) among primary strategies eVestment tracks.

Long/Short Equity funds were another big AUM loser in December, with investors pulling -$4.80 billion from these funds and bringing full-year 2021 redemptions to -$17.41 billion.

Fixed Income/Credit focused funds continued a streak of investor redemptions, with investors pulling -$4.74 billion from these funds in December and -$31.39 billion during all of 2021. These funds were also in the red for AUM growth in 2020 and 2019.

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