eVestment: Hedge Fund Assets Gain 1.56% in October on Performance Gains

Nov 20 2015 | 6:16pm ET

Hedge fund assets ticked up in October on the strength of strong rebounds in global markets, according to eVestment latest Hedge Fund Asset Flows Report

Total assets in the hedge fund space increased 1.56% during the month, noted the company, bringing the industry’s total assets under management to $3.086 trillion. Performance gains accounted for the majority of the asset increase, although investors did add an estimated $4.58 billion during the month. For the year to date, investors have added an estimated $75.45 billion into the industry.

While October’s inflows are a positive sign given the industry’s losses in August and September, eVestment warned that more redemptions likely loom for the industry into year end.

Other highlights include:

  • Credit related strategies were the primary source of negative sentiment in October. Losses in this segment have been consistent since June, and investors have been reacting by pulling money from the space in four of the last five months totaling $15.58 billion. Indeed, flows for this segment are now negative YTD, at -$2.43 billion. The last year of outflows for the group was 2009 when $18.66 billion was removed, noted eVestment. 
  • Macro funds had inflows of $2.03 billion, healthy but not enough to offset redemptions in September of $3.61 billion. Investors continue to react to the universe’s recent patches of elevated performance declines.
  • Multi-strategy funds, the most desirable segment of the industry over the last several years, have become a bellwether of institutional sentiment toward hedge funds. Inflows of $2.4 billion during the month brought YTD allocations up to $52.4 billion, or nearly 70% of the industry’s net inflows in 2015.
  • Investor interest in equity exposure was net positive in October, with an estimated $1.38 billion added. Directional/fundamental equity was the primary beneficiary. Event driven funds, which tend to focus on equity or broadly across the capital structure, continued to face redemption pressures.
  • Emerging market fund flows were negative for the fourth consecutive month, with $1.23 billion of redemptions. Investor sentiment toward emerging markets exposure is overwhelmingly negative, observed eVestment. 

Atlanta-based eVestment was founded in 2000 by Jim Minnick, Matt Crisp and Heath Wilson. The company boasts one of the largest, most comprehensive global databases of traditional and alternative strategies and provides institutional investment data intelligence and analytic solutions to clients worldwide.

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