The global hedge fund industry witnessed its first net monthly inflows in six months during February, with investors pouring an estimated US$1.63 billion (€1.44 bn) into the asset class.
Combined with positive investment performance across the sector, this pushed aggregate assets under management for the industry up by $20.62 billion to $3,241 trillion according to the latest monthly Hedge Fund Asset Flows report published by data provider eVestment.
These results are disappointing when considered on a seasonal basis, however – February 2019 was the worst February for hedge fund flows in the past 10 years.
February has typically been the most positive month of the year for net inflows, averaging $17 billion per February over the past decade, and investor dissatisfaction with hedge fund performance during 2018 has been central in explaining this loss of confidence in the sector.
“If February is a bellwether for the year’s flows, as it has tended to be, then 2019 may be a difficult year for the industry,” says the report. This illustrates that investors will not pay for disappointing performance, regardless of the industry or asset class.
Managed futures and macro strategies both experienced significant contraction, having failed to meet investors’ return expectations over the past two years. Long/short equity also experienced net redemptions during February.
There was a brighter message for multi-strategy fund strategies, with this segment attracting net inwards investment of $5.41 billion, the majority of which was allocated to larger fund managers.
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