Hedge funds saw gains of 4.48 per cent in 2016, posting better performance compared to a modest 1.78 per cent gain during 2015, according to the latest Eurekahedge Report.
The asset base for the industry contracted USD12.2 billion in 2016, on the back of steep redemption pressure with net outflows totalling USD42.5 billion for the year.
The asset base for relative value mandated hedge funds meanwhile, expanded 17.28 per cent for the year, growing by USD9.8 billion. Relative value mandated hedge funds gained 6.30 per cent in 2016, with underlying relative value volatility hedge funds up 7.22 per cent over the same period.
European hedge funds saw USD24.6 billion in investor redemptions in 2016 – the largest net asset outflows on record since 2008.
CTA/managed futures mandated hedge funds saw the highest net investor inflows among strategic mandates for 2016 (USD12.7 billion). CTA/managed futures ended the year up 1.29 per cent with strength led by underlying commodity-focused hedge funds which gained 6.96 per cent over the same period.
Investor redemptions hit industry heavy-weights in 2016, with billion dollar hedge funds recording USD52.3 billion of net outflows whilst sub-billion dollar hedge funds saw net inflows of USD9.8 billion.
Asian managers saw a modest decline in assets for the year as sub-1 per cent returns and USD2.2 billion of investor redemptions weighed on industry AUM. Underlying Greater China mandated hedge funds ended the year in negative territory, declining 4.46 per cent.
North American hedge funds were up 7.80 per cent for the year, with underlying long/short equities managers appearing as bright spots for the region – gaining 9.18 per cent in 2016. North American long/short equities hedge fund managers posted their strongest quarterly gain in Q3 2016 (+4.47 per cent).
