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Investors pull USD4.18bn from hedge funds to kick off 2022

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Investors pulled USD4.18 billion hedge funds in January, starting 2022 on a slight down note for the sector, according to the eVestment January 2022 Hedge Fund Asset Flows Report.

The outflows come on top of January 2022’s industry performance also being negative, at -1.74 per cent as reported by eVestment earlier this month. With both investor redemptions and performance declines in January, hedge fund industry AUM stood at USD3.570 trillion at the end of last month.

January outflow and performance figures might give investors and hedge fund professionals pause. But eVestment Global Head of Research and report author Peter Laurelli notes that with market volatility being driven in inflation, geo-political concerns and other economic challenges, one month of data is too little to make any predictions about how 2022 might pan out for the hedge fund business.

Laurelli says: “The hedge fund industry has produced some of its most notable successes for investors in times of crises and stress. While no one hopes for difficult times, we are in one and it will be interesting to see how this industry reacts.”

Multi-Strategy funds were the big asset winners among primary strategies eVestment tracks in January, pulling in +USD4.08 billion. This comes on top of +USD23.17 billion these funds pulled in during 2021. Inflows to these funds were concentrated, however. “Most of the net inflow went to very large products, with the vast majority going into a group where the average fund AUM was over USD10 billion,” said Laurelli.
Long/Short Equity funds were the big asset losers among the primary hedge fund strategies eVestment tracks, with investors pulling -USD5.94 billion. This comes on top of -USD16.48 billion investors pulled from these funds in 2021.

Macro hedge funds also saw big outflows in January, with investors pulling -USD2.87 billion. These funds also ended 2021 on a down note, with investors pulling -USD5.07 billion last year.

Managed Futures funds, which ended 2021 with +USD12.98 billion in new money, managed to eke out a positive month in asset flows, with investors putting +USD190 million in new money into these funds.

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