Total hedge fund assets increased 0.35 per cent in March of 2015 bringing the industry’s total assets under management to USD3.101 trillion, according to eVestment’s latest Hedge Fund Industry Asset Flows Summary Report.
Investors added an estimated USD15.6 billion of new capital to the industry in March, while performance reduced AUM by an estimated USD5.2 billion.
Investor flows have historically been weak in March as early year allocations tend to arrive in February, however March 2015 inflows were well above the last five-year March average of USD5.3 billion.
With March’s USD15.6 billion inflow, investors added an estimated USD28.2 billion into the hedge fund industry in Q1. The inflow is below the level seen in Q1 2014 (USD51.5 billion) and below the average Q1 inflows of each year since the financial crisis (USD30.0 billion), but still a strong indication of investor interest in the industry.
Multi-strategy hedge funds continued to attract a large amount of new assets in March and Q1 2015. Investors added an estimated USD9.4 billion to the multi-strategy universe in March, bringing Q1 totals to USD20.4 billion. The inflow is slightly above Q1 2014 and well above the last five year Q1 average inflow. Multi-strategy funds took in an estimated USD44.4 billion in 2014.
• Managed futures funds continue to enjoy strong investor interest in March. After bleeding assets since the H2 2012, the group has enjoyed a solid three-month inflow streak ending with USD5.8 billion of new assets in March and USD10.0 billion in Q1 2015. Managed futures inflows in Q1 were the group’s first positive quarter since Q1 2012 and their largest quarterly inflow since Q2 2008.
Investors in managed futures funds continued to show preferences for larger funds in March, a trend in place during the current three- month surge of investor interest. In March, funds with the ten largest monthly inflows had an average AUM of USD3.4 billion and accounted for 77 per cent of the group’s positive flows during the month.
Macro hedge fund flows appear to have turned a corner after eight consecutive months of redemptions ending in February. February inflows were only slightly positive, but the USD1.7 billion added in March is a positive sign and step in the right direction.
Long/short equity fund flows were positive during the month at USD2.9 billion. But the jump in inflows seen in February did not fully carry over into March, resulting in Q1 2015 flows being only slightly positive, USD840 million. It is a noteworthy to see two consecutive months of positive allocations to the universe, which hadn’t occurred since August 2014.
Credit fund flows have been more positive than equity funds in 2015, but inconsistent. The universe had outflows of USD2.3 billion in March, however February’s inflows of USD4.4 billion have kept the group’s Q1 flows positive at USD2.9 billion. This figure is well below the last five-year Q1 average inflow of USD16.7 billion.
Event driven fund flows were negative in March at USD2.2 billion. The outflow marks the third month of redemptions in the last four for the universe. Activist fund flows were virtually flat in March and the event driven subset attracted an estimated USD1.1 billion of new capital in Q1 2015, despite the broad event driven group seeing outflows of USD1.4 billion in the quarter.
Investors continued to sell their commodity hedge fund exposure in March with outflows at USD1.2 billion, which brings Q1 2015 outflows to USD1.5 billion. March was the sixth month of redemptions from commodity funds in the last eight.
