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Investors pour $10bn into hedge funds in February, continue to flee credit strategies

Monday, March 28, 2022
Opalesque Industry Update - After starting 2022 with net investor redemptions, hedge funds bounced back in February with investors pouring $10 billion in new money into the business. After January's outflows, year-to-date asset flows to the business now stand at +$7.95 billion and overall hedge fund business AUM stands at $3.582 trillion.

"Whether annual net flow has gone on to be positive or negative, every single year since 2010 February's data has shown net inflows into the industry, and this February is no different," said eVestment Global Head of Research Peter Laurelli. "The average February net inflow over the prior five years is almost $11 billion, which puts this February almost in line with the recent past."

Managed Futures funds were the big asset winner among primary strategies eVestment tracks, gaining +$2.48 billion in new money and bringing YTD flows to +$3 billion. Overall, February was a very positive month for the business, with most hedge fund types and primary strategies eVestment tracks seeing positive flows.

Multi-Strategy funds were another big asset winner in February, with +$1.33 billion in inflows, bringing YTD flows to +$6.63 billion. This comes on top of the massive +$23.17 billion in new money Multi-Strategy funds saw in 2021.

Market Neutral Equity funds saw +$1.17 billion in new money, bringing YTD inflows to +$1.54 billion. This may seem small, but given that Market Neutral Equity funds are among the smallest primary strategies eVestment tracks with total AUM at just $86.47 billion, the inflows are still meaningful for the segment.

Credit strategies continue to be a weak spot for the hedge fund business. Among major hedge fund types eVestment tracks, Fixed Income/Credit funds saw big outflows of -$4.99 billion in February, bringing YTD outflows for these funds to -$7.42 billion. This is the continuation of a long-running trend for these funds. "There hasn't been meaningful broad interest in credit exposure in hedge funds since 2014," said Laurelli.

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