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HFR Finds Improved Performance and Asset Flow in Q3

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NEW YORK (–Net inflow to hedge funds was almost US$17 billion in the third quarter, bringing industry total assets up to US$890 billion, according to Hedge Fund Research Inc. in Chicago. The figure compares favorably with the US$7.5 billion inflow HFR reported for the second quarter of this year.

Moreover, the HFR database indicated improved, if still lackluster, overall performance over the earlier quarter–a 0.9% gain compared with a 1% loss. Year to date, hedge funds in the database returned 3.57% and attracted US$46.6 billion in inflows.

Multi-strategy fund sectors experienced strong growth, with event-driven assets rising to US$117 billion and relative value arbitrage assets to more than US$110 billion.

In terms of returns, energy funds were at the top, with 8.8% for the quarter and 21.4% year to date. Total assets in this segment exceeded US$4 billion.

Distressed securities managers, with assets at US$42 billion, were strong performers, with a year-to-date return of 10.3%. Emerging markets funds notched significant upside in the third quarter after a loss in the previous quarter and are up 9.65% for the year.

Equity hedge, flat in the third quarter after going into negative territory in the second, has returned 2.2% for the year, while global macro eked out 0.6%. Convertible and merger arbitrage were flat to negative, and technology funds were in the red.

The various hedge fund databases do not all contain the same funds, so numbers from different providers vary. But statistics across the board point to growth toward US$1 trillion in total industry assets (see Previous HedgeWorld Story)

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Contact Bob Keane with questions or comments at: [email protected].


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