By Preqin
Using data from its Hedge Fund Online product, Preqin estimates that there were net outflows of $34bn over the first half of 2016; the majority of outflows ($20bn) occurred in Q2 2016. As a result, as of 30th June 2016 the hedge fund industry represented a total of $3.1tn in assets under management, down from nearly $3.2tn at the end of 2015.
Among leading hedge fund strategies, credit and equity strategy funds suffered the greatest outflows in H1, totalling $26bn and $25bn respectively. By contrast, CTAs increased their AUM by 11% over the first half of the year, recording the greatest inflows of any strategy ($17bn). Additionally, a surge of investor capital committed to multi-strategy funds in Q1 helped the strategy offset small net outflows in Q2, to register overall H1 inflows of $11bn.
Hedge Funds – Other Key H1 2016 Asset Flow Facts:
Investor Appetite: 17% of investors plan to increase their exposure to discretionary CTAs in H2 2016, the highest proportion of any strategy, while just 3% plan to invest more in event driven strategies and funds of hedge funds. Only 9% of investors plan to cut their exposure to activist funds, the lowest of any strategy.
Impact of 2015 Performance: Those funds that performed better in 2015 were more likely to see inflows in Q2 2016; 43% of funds that made gains of more than 5.00% in 2015 recorded Q2 inflows, compared to less than a quarter (23%) of those that suffered losses of 5.00% or more through the year.
Asset Flows by Fund Size: A higher proportion of hedge funds larger than $1bn recorded inflows (35%), than those smaller funds (32%). However, a higher proportion of larger funds also recorded outflows, with 44% recording losses compared to 40% of smaller funds.
Asset Flows by Location: The greatest proportion of funds based in Europe saw inflows over Q2, with 35% seeing net inflows and 38% recording outflows. In contrast, only a quarter of firms based in North America registered inflows, while 44% saw net outflows of investor capital.
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