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Global hedge fund business sees outflows in March, just slightly positive for allocations in Q1

Thursday, April 28, 2022
Opalesque Industry Update - Investors pulled $8.96 billion from hedge funds in March, leaving AUM growth for the first quarter of the year nearly flat at +$440 million, according to the just released eVestment March 2022 hedge fund asset flows data. Overall hedge fund business AUM stood at $3.623 trillion at the end of March, according to the new report. Only about 45% of funds reporting to eVestment showed net inflows in March.

"The hedge fund industry ended Q1 2022 with some segments and products performing well and generating investor interest and some not," said Peter Laurelli, the report's author and eVestment's global head of research. "Given that Q1 net flows have historically given a good indication of what to expect for the full year, we should temper our overall expectations for broad industry growth in 2022."

Managed Futures funds were the big asset winners among primary strategies eVestment tracks in March, pulling in +$1.85 billion in new money. These funds are also among the top asset winners year to date (YTD), pulling in +$4.60 billion in new money during the first quarter. Multi-Strategy funds saw a small outflow of -$1.02 billion in March but are big asset winners in Q1, with investors adding +$8.12 billion in new money into these funds.

Long/Short Equity hedge funds continued a prolonged streak of bleeding money with investors pulling -$5.23 billion from these funds in March, bringing YTD flows to -$9.84 billion. This follows investor redemptions of -$16.48 billion in 2021 and -$15.03 billion in 2020. With overall AUM at $760.81 billion, Long/Short Equity funds are still the largest primary hedge fund strategy eVestment tracks.

On the plus side, Event Driven funds eked out a positive month in March with investors adding +$590 million to these funds. This brought Q1 inflows to +$2.16 billion, adding to several years of net inflows to these funds.

Convertible Arbitrage funds were the only other primary strategy eVestment tracks to see positive flows, adding +$110 million in new investor money during March, bringing YTD inflows to +$1.26 billion. While a very small segment of the hedge fund business with only $68.40 billion in AUM, Convertible Arbitrage funds have seen positive inflows for several years.

Fixed Income/Credit funds continue see challenges, with investors pulling -$8.48 billion from these funds in March, bringing YTD outflows from Fixed Income/Credit funds to -$14.51 billion. This was the largest quarterly outflows from these funds since Q4 2015. Fixed Income/Credit funds' Q1 2022 outflows followed outflows of -$36.34 billion in 2021 and -$27.01 billion in 2020.

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