eVestment: Hedge Fund Industry Inflows +$20.65B In First Half

Jul 24 2017 | 6:33pm ET

Investor sentiment seems to be broadly catching up with improved investment performance, as capital flows to the hedge fund industry were positive in both second quarter and first half of 2017. However, June’s flows were negative again, notes industry data provider eVestment, raising questions about whether the shift in trend has staying power. 

Investors withdrew an estimated $6.97 billion from the industry in June, eVestment said in its most recent Asset Flows Report, although it still gained $7.54 billion in the second quarter and $20.65 billion for the year-to-date through June 30. Total industry assets under management stands at $3.12 trillion. 

Key asset flow highlights from eVestment’s report:

  • More than 50% of funds received net new money in each of the three months in the second quarter.
  • June redemptions were significantly more concentrated than allocations, suggesting June’s outflows are attributable to a limited group of core funds instead of a reversal in improving sentiment.
  • Losses in macro funds seem to be weighing on allocations. Five of the six asset losers in the category in June had negative first-half returns averaging -6%. 
  • Managed futures funds have been under pressure since 2016 and are again lagging other substrategies in terms of performance; investors have reacted by redeeming from the category for the second consecutive month in June. 
  • Conversely, fund flows for the event-driven segment remain negative YTD despite strong relative performance. However, eVestment notes, June marked the largest allocation to event-driven funds in six months and the second-largest in nearly two years. 
  • Asset flows to long/short equity funds were net positive for the second straight month as returns have stabilized and relative performance when compared to macro and managed-futures managers adds appeal.

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 through a suite of cloud-based solutions.


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