- Advertisement -
- Advertisement -

Hedge Fund Outflows 2016 Worst Year Since 2009?

Report: Systematic Strategies

- Advertisement -

Stockholm (HedgeNordic) – According to the latest eVestment Hedge Fund Assets Report, hedge fund outflows increased markedly in July, with investors redeeming an estimated net $25.2b from hedge funds in July. This follows outflows worth $23.5b in June, with this latest wave of redemption pressure bringing YTD flows to a negative $55.9b.

According to eVestment, mediocre performance is the prime reason behind the redemptions, with losing funds in 2015 being the primary source of outflows throughout 2016 into July. Redemptions have also accelerated within funds in June and July. The funds reporting the 10 largest outflows in July returned an average of -4.1% YTD and average losses of -5.3% in Q1 2016. By contrast, numerous funds received new allocations in 2016, including in June and July, with the largest 10 new allocations going to funds that have produced an average return of nearly 7% in 2016 and delivered positive returns on average in 2015.

Among these, commodity funds have consistently attracted new allocations this year. Investor sentiment towards commodity funds has remained positive for 14 months, during which time investors have added an estimated $10.3b. Managed futures have also delivered in 2016, supported by commodity-focused funds operating in futures markets. Redemption pressures are also emerging within some of the large, archetypal managed futures funds, however, likely due to elevated losses between March and May.

Redemptions were largest among multi-strategy funds, credit strategies, which suffered from performance, and event driven and macro funds, where redemptions in June and July have come from activist strategies and special situation credit funds. According to eVestment, Multi-strategy funds haven’t suffered this badly since the European sovereign crisis in April 2012, and credit strategies haven’t had such large non year-end redemptions since September 2011.

The redemption pressures facing the hedge fund industry in the past two months are reminiscent of the second half of 2011, according to eVestment, when investors redeemed an estimated $42b across 4 months. 2016 will be the third year on record with net annual outflows unless pressures recede, and the first since 2008 and 2009 on the heels of the global financial crisis.

 

Picture: (c) Carsten-Reisinger—Fotolia.com

Subscribe to HedgeBrev, HedgeNordic’s weekly newsletter, and never miss the latest news!

Our newsletter is sent once a week, every Friday.

Glenn Leaper, PhD
Glenn Leaper, PhD
Glenn W. Leaper, Associate Editor and Political Risk Analyst with Nordic Business Media AB, completed his Ph.D. in Politics and Critical Theory from Royal Holloway, University of London in 2015. He is involved with a number of initiatives, including political research, communications consulting (speechwriting), journalism and writing his post-doctoral book. Glenn has an international background spanning the UK, France, Austria, Spain, Belgium and his native Denmark. He holds an MA in English and a BA in International Relations.

Latest Articles

Cleaves Navigates Red Sea Disruptions

Stockholm (HedgeNordic) – Since the onset of the latest Israel-Hamas conflict in October last year, attacks by Houthi rebels in Yemen targeting cargo ships...

RFP: Irish Investor Seeks UCITS-Compliant Commodities Fund

Stockholm (HedgeNordic) – An Irish institutional investor is seeking to invest between €25 to €50 million a commodities fund for its fund of funds....

Improved Environment for Single Shorts and Options Protection

Stockholm (HedgeNordic) – Marcus Plyhr’s cautious stance on markets helped Norron Select minimize losses in 2022, closing the year with a low single-digit decline...

Strong May Performance for Nordic Hedge Funds

Stockholm (HedgeNordic) – The Nordic hedge fund industry is experiencing one of its strongest years on record, marked by seven consecutive months of positive...

New Billion Club Member

Stockholm (HedgeNordic) – The Nordic hedge fund industry is welcoming a new member to its exclusive €1 billion club: Asgard Fixed Income Risk Premia...

Coeli Partners with Peter Norhammar for Real Estate Fund Launch

Stockholm (HedgeNordic) – Swedish asset manager Coeli is partnering with real estate specialist Peter Norhammar and NRP Anaxo Management to launch a new long/short...

Allocator Interviews

In-Depth: High Yield

Voices

Request for Proposal

- Advertisement -