Podcast Center
Video Center
Webcasts
Resource Center
Events
August 31, 2016 at 06:56 AM
Hedge funds experienced net outflows of $34 billion in the first half, $20 billion of which occurred in the second quarter, according to estimates released last week by the alternatives data provider Preqin.
“Growing concern from investors regarding the recent performance of the hedge fund sector has manifested as two consecutive quarters of net outflows, taking the total size of the industry to approximately $3.1 trillion as of the end of H1 2016,” Preqin’s head of hedge fund products, Amy Bensted, said in a statement.
Most major hedge fund strategies had net outflows in the first half, with credit and equity strategy funds taking the biggest hits: $26 billion and $25 billion, respectively.
Macro strategies hemorrhaged $17 billion and niche strategies $1.7 billion.
There were also bright spots in the Preqin report. CTAs had net inflows of $16.6 billion, a 10.9% increase over the first six months of the year.
In addition, multi-strategy funds ended the first half with net inflows of $11.2 billion on the strength of the first quarter’s $12.8 billion in positive flows, which offset an outflow of $1.6 billion in the second quarter.
Relative value strategies had a net asset gain of $1.7 billion in the first half, and event-driven strategies a $700 million gain.
Preqin found that investors were becoming increasingly impatient with poor performance. Forty-seven percent of funds that suffered losses of 5% or more in 2015 recorded net outflows in the second quarter of this year, and only 23% had net inflows.
The outflow pace increased in the second quarter, with 52% of funds that lost 5% or more in the first quarter recording net outflows.
In contrast, 43% of funds that gained more than 5% last year were rewarded with net inflows in the first half, while 34% had net outflows.
According to the report, 35% of hedge funds with more than $1 billion under management reported inflows at the end of the first half, compared with 32% of funds with less than $100 million in assets.
