The hedge fund industry saw net outflows of investor capital in Q1 2016, totalling USD14.3 billion, with CTAs and multi-strategy funds the only major strategies to see new inflows, according to figures released by Preqin.
This continues from the USD8.9 billion overall net outflows that funds recorded in Q4 2015, and is in contrast to the USD28.8 billion that the industry gained in investor capital in the same period last year. Overall, the total assets under management held by hedge funds globally fell 0.48 per cent in the quarter, to stand at USD3.13tn at the start of Q2.
CTAs and multi-strategy funds gained USD13.7 billion and USD12.8 billion respectively. Equity strategies funds saw net outflows of USD9.7 billion in the quarter, while credit strategies funds saw the largest outflows of USD11.9 billion.
Preqin’s survey of investors in November 2015 found that more investors (32 per cent) plan to reduce their exposure to hedge funds in 2016 than plan to increase it (25 per cent). This is the first time this has been seen since Preqin started tracking this data in 2009.
The survey also revealed that 29 per cent of investors planned to increase their exposure to CTAs in 2016, among the highest proportion of any leading strategy. Only 8 per cent of investors planned to increase their exposure to credit strategies funds, the lowest of any leading strategy, compared with 15 per cent that planned to decrease their exposure.
2015 performance correlates strongly with the net flows of assets in Q1. Of those funds which returned more than 5.00 per cent in the year, 53 per cent saw net inflows in Q1, while only 36 per cent saw net outflows. By contrast, only 25 per cent of funds which returned less than -5.00 per cent in 2015 saw Q1 inflows, while 53 per cent saw net outflows.
Over the past four quarters, multi-strategy and CTA funds have seen the largest net inflows, gaining USD28.1 billion and USD27.0 billion respectively. Macro strategies have seen the largest net outflows, losing USD28.8 billion in investor capital. Event driven, macro, relative value and credit strategies funds have all seen net outflows in three of the past four quarters.
