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Hedge fund capital breaks record as investor inflows speed up

Increase_graphHedge funds concluded 2017 with the strongest quarterly capital inflow since the second quarter (Q2) of 2015 with technology, healthcare and emerging markets leading industry gains.

According to figures from the Hedge Funds Research ‘HFR Global Hedge Fund Industry Report’, the inflows helped increase total hedge fund assets under management by $59 billion (€48 billion) to $3.21 trillion in Q4 2017 - the sixth consecutive quarterly record.

Of this $6.89 billion was down to new capital from investors during the quarter, which brought total 2017 inflows to $9.8 billion.

Flows by firm size for the full year 2017 were led by managers with less than $1 billion. These received $7.4 billion of new capital, while the industry’s largest managers (those with greater than $5 billion AuM) received $6.3 billion of inflows. Investors withdrew a net $3.9 billion from firms managing between $1 billion to $5 billion.

Kenneth Heinz, president of HFR, said: “2017 was a historic year in the hedge fund industry that included advancements in both the core and emerging areas of the industry, and that combined record capital levels and consistent performance gains with the evolution of risk parity, blockchain and cryptocurrencies.”

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