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Hedge fund industry capital reaches new heights

hedge fund capital riseInvestors took hedge fund capital to a seventh consecutive record in the first quarter of the year.

The increase of $4.5 billion (€3.6 billion) lifted industry assets to $3.215 trillion, according to the HFR’s ‘Global Hedge Fund Industry Report’.

Net inflows were $1.1 billion in the first quarter, but the gains were moderated by a capital outflow in equity hedge strategies. It was the fourth consecutive quarter of positive fund flows, with the last outflow occurring in the first quarter of 2017.

Equity hedge strategy outflows totalled $6.57 billion in the first quarter, which follows the 2017 outflow of $5.4 billion. Despite this, equity hedge remains the industry’s largest strategy capital area with $937 billion.

Macro hedge funds posted a small net asset inflow for in the first quarter, as investors rotated out of discretionary commodity, fundamental and multi-strategy funds, and into quantitative, trend-following commodity trading adviser strategies.

Kenneth J. Heinz, president of HFR, said investor reallocation from equity beta to M&A and credit market exposures, and reallocation from fundamental macro strategies towards quantitative, trend-following macro would continue to drive industry growth and performance through mid-2018.

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