The Eurekahedge Hedge Fund Index was up 0.97% in February1 while underlying markets as represented by the MSCI World Index2 gained 2.72% over the same period. Among regional mandates, Latin American managers led the table, up 2.75% during the month followed by Asia ex-Japan managers with 1.43%. Across strategies, distressed debt hedge funds were in the lead with 1.34% gains followed by event driven hedge funds with 1.26%.
Final asset flow figures for January 2017 revealed that managers reported performance-based gains of US$3.2 billion while recording net asset inflows of US$5.2 billion. Preliminary data for February shows that managers have posted performance-based gains of US$14.1 billion. Preliminary net asset flows were positive in February with US$11.9 billion of inflows into the industry. Redemption pressure appears to have eased though a clearer picture should emerge in coming months on the outlook for investor allocation into hedge fund regional and strategic mandates. The current assets under management (AUM) of the global hedge fund industry stand at a total of US$2.26 trillion.
Figure 1a: Summary monthly asset flow data since January 2012
Key highlights for February 2017:
- Hedge funds were up 0.97% in February with year-to-date gains coming in at 1.87%. Investor subscriptions have picked up pace since the start of 2017, with net inflows coming in at US$17.1 billion.
- AUM for the North American hedge fund industry has reached a record high of US$1.52 trillion. Investor subscriptions for 2017 year-to-date stood at US$15.8 billion, with US$11.7 billion of performance-based gains recorded over the same period of time.
- The US$261.0 billion CTA/managed futures mandated hedge fund industry saw the highest net investor inflows among strategic mandates for 2017 (US$8.4 billion). Managers posted modest performance-based gains totalling US$1.4 billion over the same period.
- AUM for long/short equities hedge fund managers grew by US$10.1 billion over the first two months of the year with strength led by performance-based gains of US$8.6 billion. Long/short equities hedge fund managers are up 2.72% over the past two months.
- Asian managers saw investor subscriptions of US$1.5 billion on a year-to-date basis, with performance-based gains of US$1.9 billion. On a year-to-date basis, Asia ex-Japan managers were up 3.55% with underlying Greater China and Indian managers up 5.49% and 6.76% respectively. Japan focused funds were up 1.67% over the same period.
- European managers gained 0.52% during the month, with year-to-date gains coming in at 1.16%. The US$507.5 billion European hedge fund industry was the only region to witness year-to-date investor redemptions of US$1.2 billion while performance-based gains of US$2.8 billion were recorded.
- Sub-billion dollar hedge funds recorded strong investor interest as of 2017 year-to-date, with net inflows totalling US$9.1 billion. Within sub-billion dollar hedge funds, mid-size funds managing between US$100 million and US$500 million have seen inflows of US$4.9 billion.
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