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Investors pull another USD3.78bn from hedge funds as consolidation pressure mounts

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Global investors pulled another USD3.78 billion from hedge funds in May, according to the May 2019 eVestment Hedge Fund Asset Flows Report. However, despite the overall negative industry flows, many funds have been successfully able to raise new assets in 2019. 

This includes funds in categories which are seeing the most negative outflows. This highlights the importance, firstly, of strong performance, but secondly the roles of marketing and sales within hedge funds, and the ability to find and exploit demand for funds in even some of the most challenging segments.
May’s results bring year to date (YTD) flows to -USD25.43 billion. Performance losses reduced assets further, pushing total industry AUM down to USD3.238 trillion. Overall industry results point to continued consolidation in the industry as investors gravitate to funds that are performing strongly and/or that are successfully marketed.
According to the report, multi-strategy hedge funds were the big winners in asset flows in May among primary strategies, pulling in +USD3.95 billion in May, bringing YTD inflows to these strategies to +USD6.56 billion.

Event driven hedge funds were also big asset winners in May, gaining another +USD2.39 billion. Event driven funds are also big winners YTD, pulling in +USD7.41 billion so far this year.

The apparent interest in commodity hedge funds in May, +USD1.53 billion of net inflows, was highly influenced by a handful of products, rather than a sign of broad interest in commodity exposure.

Macro hedge funds, meanwhile, were among the big asset losers in May, with redemptions of -USD6.22 billion, bringing YTD outflows to -USD12.11 billion, while long/short equity funds also saw big out flows in May and YTD of -USD2.37 billion and -USD16.32 billion, respectively.

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