Asset Flows Update

Hedge fund assets under management grew by US$4.5 billion in December, bringing the 2009 hedge fund industry total assets to $1.48 trillion. The Eurekahedge Hedge Fund Index gained a healthy 1.06% in the month to end 2009 on a positive note, bringing the yearly returns to 19.38% – the best annual gains since 2003. The positive performance during the month was delivered amid increased risk appetite, which pushed global equity markets higher – the MSCI World Index gained 1.69% while the S&P 500 was up by 1.93%.

Performance-based gains accounted for most of the growth in December as managers delivered US$4 billion through positive results. Although December was a relatively slow month for inflows, gaining US$0.59 billion through subscriptions, it was the eighth consecutive month of positive net asset flows. Given a negative performance and a couple of high-profile hedge fund fraud cases in October 2009, a slow pace of inflows was expected. Furthermore, investors tend to slow down their allocations at the year-end, preferring instead to invest in the first quarter. Indeed, January 2010 is already proving to be very active.

Figure 1 shows the monthly asset flows across the hedge fund industry since the end of 2007.

Figure 1: Summary Monthly Asset Flow Data for 2009

Click on the image for an enlarged preview

Below are the highlights for the month of December:

  • 2009 performance of 19.38% is the best on record since 2003. Asia ex-Japan funds posted gains of 37.39% for 2009 which is the best yearly performance for all regions on record.
  • November is the eight consecutive month of positive net inflows to the industry, bringing the total assets from US$1.29 trillion to... 

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