The global hedge fund industry has seen a USD76 billion net inflow of assets through the first half of 2015, bringing the size of the industry to USD3.22 trillion, according to figures released by Preqin.
The second quarter saw the greater amount of inflows from investors, with USD48 billion in Q2 compared to USD29 billion in first quarter. Single-manager hedge funds specifically saw net inflows of USD52 billion in Q2, three times as much as the USD18 billion net inflow of assets they recorded in the first quarter. CTAs, on the other hand, had a net outflow of USD5 billion in the second quarter, eroding the USD11 billion growth they had seen in Q1.
Some 49 per cent of multi-strategy funds saw net inflows in Q2, the highest proportion of all major hedge fund strategies. Conversely, only 29 per cent of niche strategy funds saw net inflows, with 65 per cent of funds in these niche strategies witnessing outflows.
Funds based in North America, Europe, and Asia-Pacific all had similar asset flows in Q2, with 41-44 per cent of funds seeing inflows, and 38-39 per cent seeing outflows. In contrast, funds based outside these regions had net inflows in only 33 per cent of cases, while 62 per cent of funds had outflows.
A total of 43 per cent of all hedge funds have seen an increase in allocation from North American investors, and 20 per cent have seen increases from Asia-based investors. Conversely, 14 per cent of funds with Europe-based investors saw decreases from that group, the highest of any region.
Some 60 per cent of hedge funds with more than USD500 million in assets under management had net inflows in Q2, almost twice the proportion that saw net outflows. Only 38 per cent of funds worth less than USD100 million grew in the quarter, with net outflows experienced by 43 per cent of funds in this group.
A total of 57 per cent of hedge fund managers reported increased allocations from high-net-worth individuals (HNWIs) and family offices respectively during H1 2015.
“Despite recent Preqin research indicating that investors are growing impatient with the returns of hedge funds, the industry has continued to accumulate assets in the first half of the year,” says Amy Bensted, Head of Hedge Fund Products, Preqin. “Hedge funds now manage over USD3.2 trillion in assets, amassing net inflows of more than USD76 billion in the first six months of 2015. The largest funds continue to see the highest inflows, with approximately 60 per cent of funds with more than USD500 million in assets gaining net inflows in Q2 2015.
“The growth of the hedge fund sector highlights the continued need for these products by institutional investors, despite any short-term concerns around performance and fees. In light of recent equity market turbulence, the ability of hedge funds to provide consistent and non-correlated returns may prove even more valuable to investors in the second half of the year and we could see continued inflows over the rest of 2015.”