Hedge Fund Business Still Seeing Outflows, But Performance Boosts AUM

22 Aug

Hedge Fund Business Still Seeing Outflows, But Performance Boosts AUM

Investors withdrew another $8.42 billion from the global hedge fund industry in July, according to the July 2019 eVestment Hedge Fund Asset Flows Report. But strong performance in the industry continues to boost overall industry assets under management (AUM), which stood at $3.303 trillion last month, according to the new report.

Hedge funds have generally been in the green this year, with overall industry performance standing at +7.37% year-to-date, according to eVestment hedge fund performance data. But many investors still may be stinging from the overall industry performance of -5.08% in 2018, causing the industry to suffer from asset outflows based on decisions made by investors months ago following that dismal year. So far this year, only 37% of funds reporting to eVestment have seen net inflows.

Event Driven funds were the only fund type to see significant inflows in July, with investors adding +$2.88 billion to these funds last month. YTD flows into these funds stand at +$10.27 billion.

Other interesting points from the July report include:

  • Other primary strategies that saw investor inflows in July included Relative Value Credit funds with +$780 million inflows, MBS Strategies with +$240 million inflows and Distressed funds with +$160 million inflows.
  • Long/Short Equity funds continued their losing streak in July, with investors redeeming -$4.55 billion. YTD these funds have seen -$25.53 billion in outflows. Long/Short Equity funds still represent the largest primary hedge fund strategy tracked by eVestment, with AUM of $765.57 billion.
  • Managed Futures and Multi-Strategy funds also saw meaningful outflows in July, at -$1.73 billion and -$1.64 billion respectively.
  • Hedge funds focused on and based in Europe are seeing harder times than most other regions, with funds focused on Europe seeing outflows of -$2.27 billion and funds domiciled in Europe seeing outflows of -$6.32 billion.

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