Hedge funds attracted net capital inflows of nearly $20 billion in the first quarter of this year, according to research from Preqin, reversing five straight quarters of net outflows and pushing total industry AUM to $3.35 trillion.
Combined with fairly consistent performance gains for much of the past year, the influx of fresh capital pushed total assets held by hedge funds grow up 3.2 percent in the first quarter, Preqin said. All leading hedge fund strategies experienced a percentage increase in total assets and, notably, macro strategies funds expanded beyond $1 trillion in AUM for the first time.
Preqin’s Q1 2017 Hedge Fund Asset Flows Report also found that macro strategies funds and event driven strategies funds attracted the largest amount of new capital during the quarter, recording net inflows of $11.1 billion and $8.9 billion respectively.
It also noted that the total assets held by niche strategies grew 10 percent to $16 billion, the largest percentage increase of any strategy.
“2016 was undeniably a difficult year for the hedge fund industry, with net outflows reflecting a reduced appetite for the asset class from institutions following a sustained period of low returns to investors since 2014,” said Amy Bensted, head of hedge fund products for Preqin.
“However, following an extended run of improved performance since March 2016 – the 12-month return of hedge funds is 10.67% - investor sentiment seems to be improving in 2017, which is reflected by inflows over the start of the year.”
Hedge funds, Preqin, Amy Bensted, Cayman Islands