Wednesday, 30 July 2014
Last updated 19 min ago
May 21 2008 | 4:04pm ET
For the first time on record, the hedge fund industry is actually shrinking, according to HedgeFund.net.
The research firm’s first-quarter asset flows report show that total hedge fund assets fell 1.4% in the first three months of the year, as performance losses outstripped $53 billion in inflows. The quarterly decline—the first ever recorded by HFN—leaves hedge funds managing $2.848 trillion.
Fixed-income hedge funds—despite performance losses—were a favorite of investors, with assets rising by 3.6% to $554.8 billion. Meanwhile, redemptions and performance losses left equity hedge fund assets down 5.4% at $1.038 trillion.
Emerging markets, last year’s top-performing strategy, saw dreadful performance wipe out any asset gains from inflows, as $27.8 billion in losses swamped $9.45 billion in new money, leaving such funds down 5.5%. Latin America funds bucked that trend, with assets rising 29.8% to $21.28 billion due to new fund launches and inflows.
Distressed and CTA/managed futures funds were also favored by investors, the latter seeing its asset level rise 15.3% to $196 billion, and the former 3.3% to $252.3 billion.
Funds of hedge funds, by contrast with the industry as a whole, more than made up for their performance losses through new investments. Investors poured $71.9 billion, while the market subtracted $57.2 billion, leaving funds of funds up 1.1% at $1.404 trillion.
Jul 8 2014 | 10:48am ET
The surge in derivatives regulation is among the most complex challenges facing the financial services industry today. Northern Trust’s Joshua Satten recently spoke with FINalternatives to share insights into the challenges presented by new regulation and explore how the industry is responding. Read more…