The July 2014 eVestment Hedge Fund Asset Flows report shows some slowing in hedge fund asset growth and the impacts of outflows from several hedge fund sectors.
A few key points from the new report, according to eVestment Vice President of Reseach and report author Peter Laurelli include:
- Hedge fund inflows continued for the seventh consecutive month in July, albeit at a muted pace. Performance losses caused industry assets to decline for the second month in 2014, but remain above the $3 trillion mark.
- The primary reason for muted net inflows were redemptions from credit strategies, which saw $2.4 billion redeemed during the month, and a second consecutive month of elevated outflows from macro funds.
- Macro outflows of $2.5 billion in July brought YTD flows into negative territory. If the current trend continues, macro funds will have experienced net outflows for two consecutive years. This has not occurred since at least 2003.
- Investor interest in equity exposure remained high in July and has been positive in each of the last thirteen months dating back to the interest rate spike in May/June 2013. The $8.3 billion of new inflows brings YTD totals to $74.0 billion, by far the largest inflows for the group since 2007.
- Along with long/short equity strategies, event driven funds have been a beneficiary of the repositioning of institutional assets away from long-only US equity strategies. The universe brought in an estimated $2.2 billion in July and $37.2 billion YTD.
- Investors continued to allocate into strategies focused on European markets in July, a continuation of a year-long trend and a sign of investor confidence in the presence of opportunities in both European credit and equity markets. Inflows were $2.4 billion in July and $25.0 billion in 2014.