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Hedge funds experience redemptions of $22bn in April, CTAs inflows of $5bn

Wednesday, June 29, 2022
Opalesque Industry Update - Hedge fund redemptions slowed somewhat in April 2022 though the trend continued, reports BarclayHedge's latest Fund Flow Indicator. The month's outflows totalled $22.40 billion, 0.44% of industry assets, a reduction from the $35.37 billion in outflows the industry experienced in March.

A $131.83 billion trading loss during the month brought total hedge fund industry assets to nearly $5.11 trillion as April ended.

Recession fears amid the Fed's so far unsuccessful attempts to control U.S. inflation brought further anxiety to investors already dealing with the Russia-Ukraine conflict, volatile equity markets, rising interest rates, soaring food and energy prices and slowing economies. Trading losses hit many hedge fund subsectors, and a clear majority of subsectors saw net redemptions in April.

For the 12 months through April the global hedge fund industry experienced $87.21 billion in inflows. A $211.06 billion trading loss over the period brought total industry assets to $5.11 trillion figure as April ended, down from $5.14 trillion at the end of March but up from $4.27 trillion a year earlier.

Subsector inflows
Subsectors swimming against the redemption current to post inflows in April included Multi-Strategy funds, adding $6.84 billion, Equity Long/Short funds, with $2.15 billion in net inflows, Merger Arbitrage funds, bringing in $848.16 million, Option Strategies funds, adding $815.53 million, and Distressed Securities funds, with $51.45 million in inflows.

Subsector outflows
Subsectors seeing the largest outflows in April included Fixed Income funds, with $13.29 billion in redemptions, Equity Long Bias funds, shedding $4.44 billion, Emerging Markets - Global funds, with $3.27 billion in outflows, Equity Long-Only funds, with $2.65 billion in redemptions, and Sector Specific funds, with $2.17 billion in outflows.

Redemptions through regions
Hedge fund redemptions were the norm nearly without exception across the world's regions in April. Standing alone was Japan, where hedge funds brought in $70.27 million during the month. Hedge funds in the U.S. and its offshore islands experienced the largest redemptions in April, with $13.71 billion in outflows. Hedge funds in the U.K. and its offshore islands added $9.05 billion in redemptions, with another $8.23 billion coming from funds in Continental Europe.

CTAs continue to see inflows which push assets to new all-time high of $380.59 billion
The managed futures industry fared better in April, posting $4.99 billion in inflows, building on $2.09 billion in inflows in March and $2.93 billion in February. Three of four CTA subsectors experienced inflows for the month.

Over the 12-month period through April, the managed futures industry experienced $5.49 billion in inflows. A $46.58 billion trading profit over the period contributed to the $380.59 billion in total CTA industry assets, up from $339.17 billion a year earlier.

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Full detailed report here:

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