Hedge fund assets exceed $3 trillion “milestone”

Hedge fund industry assets surpassed the $3 trillion (€2.8 trillion) milestone for the first time last year, according to research firm HFR.

However, eVestment had already estimated that hedge fund assets were above $3 trillion and other firms had said that assets had fallen for the first time since 2008.

But HFR said that hedge fund assets increased by $121 million last year, the largest increase since 2014.

The firm said that performance gains offset investor outflows for the third consecutive quarter in Q4 last year. Assets increased by $46.8 million in Q4 bringing total industry capital to $3.02 trillion.

Led by performance-based gains, event driven strategies led asset growth in Q4, with these funds increasing by $14.8 billion to $777.2 billion for 2016.

Despite this, investor withdrawals from event driven strategies continued, totaling $10.8 billion in Q4 and $38.2 billion for 2016. This strategy saw the most outflows of all the various types hedge fund, especially the sub-strategy of special situation.

“Growth occurred against a backdrop of mixed withdrawals, as investors and institutions positioned [themselves] for continued geopolitical and economic uncertainty in 2017,” said Kenneth Heinz, president of HFR.

HFR produces the HFRI, HFRX and HFRU indices, which it said are the industry’s most widely used benchmarks of global hedge fund performance. The firm also calculates over 100 indices of hedge fund performance ranging from industry-aggregate levels down to specific, niche areas of sub-strategy and regional investment focus.

©2017 funds europe

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