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Asset Flows Update for the Month of January 2014

Introduction

Hedge funds started off the year against the backdrop of a difficult market setting as concerns over the health of the global economic recovery resurfaced; aided by disappointing PMI numbers from China and a deteriorating situation in emerging economies as the ‘QE withdrawal symptoms’ began to manifest themselves yet again. The Eurekahedge Hedge Fund Index was down 0.48%1 during the month, outperforming underlying markets as the MSCI World Index declined 3.74%2 in January.

 

The industry witnessed strong growth in assets under management (AUM) in 4Q 2013, with total assets rising sharply on the back of strong performance-based gains and net inflows from investors, registering a cumulative increase in AUM of US$63.2 billion. In January there was a slight detraction from this trend as managers incurred performance-based losses of US$5.9 billion while net inflows were positive (US$1.9 billion), with the industry shedding a net of US$4.0 billion during the month. This brings the current AUM of the industry to US$2.01 trillion.

Figure 1: Summary monthly asset flow data since January 2011

 

Key highlights for January 2014:

  • Hedge funds surpassed the MSCI World Index by over 3% in January, with almost 90% of fund managers outperforming underlying markets during the month.
  • Fund of hedge funds outperformed underlying single managers for the first time ever, up 8.09% in 2013 - and their best performance in the last four years
  • Final figures for 2013 put the growth in global hedge fund AUM at US$240 billion – with performance-based gains and net asset inflows for the year at US$103 billion and US$137 billion respectively.
  • Long/short equities hedge funds recorded their 14th consecutive month of positive net-flows, with investors allocating US$4.4 billion to the strategy in January this year.

The full article is available in The Eurekahedge Report accessible to paying subscribers only.

Subscribers may continue to login as usual to download the full report and non-subscribers may email database@eurekahedge.com to enquire on how to obtain the full research report.

 

Footnote

1Based on 48.19% of funds which have reported January 2014 returns as at 13 February 2014

2 MSCI AC World Index (USD)