Hedge fund capital surpassed the $4 trillion milestone to begin the fourth quarter, according to data by HFR, a global insights provider in the alternative investment industry, specializing in the indexation and analysis of hedge funds.

According to HFR, the increases were driven by macroeconomic uncertainty, including sharply increased interest rates, continued inflationary pressures and economic weakness, as well as geopolitical uncertainty, including military conflicts in Russia, Ukraine and the Middle East.

Inflows for Q3 were concentrated in both mid-sized and the industry’s largest firms, with firms managing between $1bn and $5 bn capital receiving an estimated $2.9bn in net investor inflows while those managing greater than $5 bn experienced an estimated net asset inflow of $2.2bn.

YTD for 2023 these firm AUM tiers have received an estimated net $3.8bn and $16.1bn, respectively. Firms managing less than $1bn experienced estimated outflows of $2.8bn for Q3 and $5.0bn YTD.