Research

Asset Flows Update

Introduction

The Eurekahedge Hedge Fund Index continues to gain ground in Q4, ending with an increase of 0.77% during the month of November1 . Meanwhile underlying markets as represented by the MSCI World Index2 were up 0.38%. All hedge fund regional mandates posted positive returns during the month with most equity markets ending the month in positive territory.

Final asset flow figures for October revealed that managers reported performance-based gains of US$12.4 billion while recording net asset outflows of US$1.7 billion. While subscriptions were marginally positive, a number of large hedge funds with a CTA/managed futures mandate liquidated during the month leading to net outflows in October 2015. Preliminary data for November shows that managers have posted performance-based gains of US$9.3 billion while recording net outflows of US$1.0 billion, bringing the current assets under management (AUM) of the global hedge fund industry to a total of US$2.25 trillion, with annual asset growth totalling US$110.7 billion as of November 2015.

Figure 1a: Summary monthly asset flow data since January 2012
 

Key highlights for November 2015:

  • Hedge funds are up 2.45% for the year, with the total AUM growing by US$110.7 billion in 2015. US$71.2 billion of the gain in assets are attributed to investor inflows and US$39.6 billion to performance-driven gains. This compares with an AUM growth of US$121 billion in 2014 where investor allocations stood at US$34.8 billion while performance-driven gains came in at US$86.2 billion.
  • Almost 58% of hedge fund managers have posted positive returns in 2015, their lowest on record since 2011. Around 20% of the managers have posted gains in excess of 8% this year while around 15% of the managers have reported losses exceeding 8%.
  • Asia-ex-Japan investing funds have delivered the best returns globally and are up 7.07% for the year. Assets managed by Asia-ex-Japan grew by US$9.6 billion as of 2015 year-to-date with US$4.7 billion attributed to investor inflows and US$4.9 billion attributed to performance-driven gains. Within the region, Greater China mandated hedge funds are up 9.45%, outperforming the CSI 300 Index by 8.52%.
  • North American hedge funds have seen their assets grow by US$60.6 billion since the start of the year, with about 60% of the gain in assets attributed to investor inflows. However, performance has been lukewarm with North American mandated funds up 0.72% year-to-date – on track to post their worst returns since 2008.
  • On a year-to-date basis, CTA/managed futures hedge funds have grown their asset base by 18%, recording their highest level of investor inflows on record since 2006 with net investor allocations worth US$27.8 billion. Total AUM for CTA/managed futures funds stand at US$241.1 billion, the highest level on record.
  • Average performance and management fees charged by new launches in Europe this year stand at historic lows, with average performance fees declining to 13.91% while average management fees are down to 1.16%. For more details refer to this month’s 2015 Overview: Key Trends in European Hedge Funds report

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Footnote
1 Based on 41.72% of funds which have reported November 2015 returns as at 10 December 2015
2 MSCI AC World Index (Local)
 
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