Hedge funds gain modest inflows despite Calpers retreat

Mixed-chartNet inflows into hedge funds tracked by data firm eVestment were an estimated $12.6 billion (€9.8 billion) in August, continuing a trend that has seen positive flows every month this year.

The inflow came despite news that Californian pension scheme Calpers, one of the most influential institutional investors in the US, would remove the $4 billion it invests in hedge funds over the next year – a decision that might inspire other institutions to do the same.

Calpers says it is retreating from hedge funds to reduce cost and complexity in its portfolio and there is some evidence that other investors have made similar decisions – net inflows to hedge funds in June and July were below average, according to eVestment. However, the data provider says "August's increase is a strong signal that demand persists".

Hedge funds that invest in equities have gathered the most assets this year, with event-driven funds in particular gaining more new money than any other strategy tracked by eVestment.

In total, there was a little over $3 trillion held in hedge funds as of the end of August, according to the data, an increase of 1.6% compared with the previous month – mostly the result of market gains.

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