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Portfolio > Alternative Investments > Hedge Funds

Liquid Alts Had $3.2 Billion Net Inflows in Q2

By Michael S. Fischer

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Wilshire Funds Management’s latest quarterly monitor of the liquid alternative industry shows that investor allocations during the second quarter were generally positive across the industry, with approximately $3.2 billion in net inflows.

At the end of June, 511 liquid alt funds had $310 billion in assets under management.

Relative value funds experienced the most significant allocations, according to the report, with net inflows of $2.1 billion, as investors continued to minimize duration exposure in light of anticipated Federal Reserve rate hikes.

BlackRock Strategic Income Opps Fund, John Hancock Strategic Income Opps and Guggenheim Macro Opportunities Fund, among the biggest relative value funds, reported the largest net inflows during the second quarter — $1.1 billion, $900 million and $700 million.

Multi-strategy funds experienced $1.1 billion in net inflows during the period.

Stretched equity market valuations prompted investors to seek defensive equity exposures in equity hedge funds, allocating $840 million, according to Wilshire. AQR Long-Short Equity Fund had net inflows of $800 million.

At the same time, capital continued to exit the global macro space for a third consecutive quarter, draining fund coffers of $690 million.

Event-driven also hemorrhaged assets during the April-to-June period, losing $70 million. Several major players continued to experience net outflows during the second quarter, according to Wilshire:

  • Goldman Sachs Strategic Income: $600 million
  • PIMCO RAE Worldwide Long/Short PLUS: $500 million
  • John Hancock Global Absolute Return: $500 million
  • Catalyst Hedged Futures Strategy: $400 million

JPMorgan Unconstrained Debt suffered the largest net outflows during the quarter, $800 million.

During the second quarter, 10 new liquid alt funds rolled out, while 21 were liquidated, the report said.

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