FoF Asset Flows Positive YTD Despite Q3 Outflows

Nov 5 2014 | 4:15pm ET

Funds of hedge funds saw outflows in Q3 2014 but remain positive for the year,  according to new data from eVestment.

Single-strategy FoFs were the main reason flows were negative in the third quarter, said eVestment VP and head of research Peter Laurelli—they saw redemptions of $7 billion over the monitored period while multi-strategy FoFs saw inflows of $24 billion.

“Barring major redemptions in Q4, commingled FoF flows will be meaningfully positive for the first year since 2007,” said Laurelli.

That said, fund of funds' share of the overall hedge fund industry has declined significantly since 2008.

Since the beginning of 2013, eVestment reports, FoFs appear to have increased their exposure to event-driven strategies, long/short credit and even managed futures, while decreasing their exposure to macro strategies. However, macro strategies make up a significantly larger percentage of FoF portfolios than do managed futures (11.6% vs. 5.0%).

Long/short equity strategies account for about 42% of reported manager positions, an exposure which has increased nearly 5% since 2009.

Event-driven & distressed strategies account for 20%; macro for 12%; credit for 9%; managed futures, 5%; relative-value multi-strategy, 6%; market neutral equity 4%; and other strategies (short-bias, convertible arbitrage, capital structure opportunity), 3%.

Since 2012, FoFs appear to have become more concentrated, holding fewer positions in hedge funds

In Depth

Q&A: Star Mountain's Brett Hickey On Investing In 'The Growth Engine Of America'

Sep 22 2017 | 5:06pm ET

Lower middle-market companies form the economic fabric of the nation, but they can...


CFA Institute To Add Computer Science To Exam Curriculum

May 24 2017 | 9:25pm ET

Starting in 2019, financial industry executives sitting for the coveted Chartered...

Guest Contributor

Don’t Overlook These 6 Hybrid Cloud Concerns

Sep 14 2017 | 6:27pm ET

Cloud-based technology solutions have made tremendous inroads into the alternative...


From the current issue of

With NFL season on the horizon, it’s time to take a look at our Fantasy Football value picks. Last year, we nailed it on Drew Brees, Jordan Howard, Frank Gore and Dwayne Allen. We missed pretty badly on Duke Johnson, Demaryius Thomas, Mohammed Sanu and Eli Manning.