eVestment: July Inflows Bring Hedge Fund Industry AUM To Near Record

Aug 24 2017 | 12:45am ET

Investors continued to allocate fresh capital to the hedge fund space in July, according to new research from eVestment, adding $7.91 billion in inflows during the month and bringing total industry AUM to a near-record $3.163 trillion.

The solid month brought year-to-date inflows to +$30.5 billion, eVestment said in its July 2017 eVestment Hedge Fund Asset Flows Report. Total industry AUM hit a record $3.168 trillion in May of 2015, the company said.

Other signs of a sentiment turnaround exist. For instance, a greater proportion of funds had net inflows than outflows during July for the fourth consecutive month. 

Key highlights from eVestment’s report: 

  • Equity hedge funds were big winners in July, with inflows of +$4.96 billion, bringing YTD inflows to +$9.95 billion.
  • Among primary strategies, Long/Short Equity funds saw the biggest inflows in July, at +$3.38 billion.
  • Macro funds, at +$2.41 billion, and Market Neutral Equity funds, at +$1.87 billion in July, were also big winners.
  • “Multi” was not the watchword in July, with Multi-Asset funds down -$5.05 billion in July and, among primary strategies, Multi-Strategy funds down -$3.30 billion in the month.
  • Managed Futures funds’ disappointing performance so far in 2017 was reflected in -$1.31 billion in outflows in July.
  • A redistribution of assets is evident. For a second consecutive month, the proportion of funds losing more than 2% of AUM from outflows, and more than 5% of AUM from outflows has been elevated, while the proportion of funds gaining the same levels due to inflows has not increased. With more funds getting new money than losing money, and a higher proportion of funds losing larger proportions of their AUM, this signals money being taken from a few, and being allocated to more. 
  • Macro hedge funds had positive net flows in each of the first five months of 2017, and had been leading the industry’s asset gathering efforts. 
  • Managed futures are not seeing the same level of investor confidence as macro managers. Despite a rebound in July, managed futures fund performance has been disappointing in 2017. Given the time it takes to make a redemption decision, and given the backdrop of four consecutive months of performance losses prior to July, the near-term outlook for managed futures flows is likely negative. 

Atlanta-based eVestment was founded in 2000 by Jim Minnick, Matt Crisp and Heath Wilson. The company boasts one of the largest, most comprehensive global databases of traditional and alternative strategies and provides institutional investment data intelligence and analytic solutions to clients worldwide through a flexible suite of cloud-based solutions.

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