Hedge fund flows were largely flat in April as investors took a pause from re-engaging the sector, according to new data from eVestment.
The sector saw estimated net withdrawals of $930 million during the month, eVestment said in its latest Hedge Fund Industry Asset Flows Report, bringing year-to-date flows to $12.18 billion and total industry AUM to $3.107 trillion.
Highlights of the report:
- Among primary strategies, Market Neutral Equity (up $3.19 billion), Directional Credit (up $2.84 billion) and Macro funds (up $1.68 billion) were big winners in asset allocations.
- Macro funds are among the big winners YTD, pulling in $11.58 billion so far this year.
- The continued interest in Macro strategies is evidence that investors are using the industry not just for its increasing prevalence of quantitative strategies, but for expertise on how to navigate, and preferably to benefit, in a global environment increasingly influenced by major geopolitical themes.
- Multi-Strategy and Long/Short Equity strategies were the biggest losers among primary strategies in April, both seeing AUM drop a bit more than $3 billion in April.
- A low proportion of funds received new money in April, and YTD flows suggest some consolidation among funds. Smaller funds that performed poorly in 2016 seeing AUM fall while strong 2016 performers are seeing more positive asset growth.
- Asset flows for hedge funds domiciled in Europe turned positive in April, increasing by $1.32 billion, while YTD flow were still a negative $0.24 billion.
- Conversely, firms domiciled in the Americas saw AUM fall $1.66 billion, while YTD assets are still up at positive $11.77 billion.
- Investors remain on edge about managed futures allocations, with sentiment shifting in April as 65% of managed futures managers reported redemptions and 55% have YTD outflows.
- Despite an apparent shift towards positive sentiment at the end of 2016, emerging market flows were low/negative in April for the second consecutive month, suggesting investors are largely content to sit on the sidelines for now.
Atlanta-based eVestment was founded in 2000 by Jim Minnick, Matt Crisp and Heath Wilson. The company boasts one of the largest, most comprehensive global databases of traditional and alternative strategies and provides institutional investment data intelligence and analytic solutions to clients worldwide.