- Advertisement -
- Advertisement -

Hedge Fund Assets Edge Down in Third Quarter

- Advertisement -

Stockholm (HedgeNordic) – Hedge fund industry assets dropped modestly to $3.24 trillion in the third quarter from the prior quarter’s record of $3.245 trillion. According to Hedge Fund Research (HFR), capital inflows to new hedge fund launches and the industry’s most established players were offset by outflows stemming from fund liquidations and investor redemptions from small- and mid-sized hedge fund firms. Net capital outflows in the third quarter amounted to an estimated $6.8 billion.

“Total hedge fund industry capital was little changed in 3Q as a number of contributing factors had partially offsetting impacts and influences, including, but not limited to, beta reducing rebalancing and reallocation, liquidations and launches, and an increase in market volatility associated with ultra-low interest rates,” said Kenneth J. Heinz, President of HFR, in a press release.

Hedge fund investors increased exposure to fixed-income and credit-based relative value arbitrage, and event-driven strategies, with investors positioning for ultra-low interest rates for the near term amid nearly $16 trillion of negative-yielding European government debt. Event-driven strategies received an estimated $5.7 billion in net flows during the three months that ended September, bringing strategy group’s total assets under management to $852.2 billion.

Total capital invested in macro strategies increased by $6.1 billion quarter-over-quarter to $599.5 billion, as performance gains offset investor outflows. Investors withdrew an estimated $4.8 billion from macro strategies in the third quarter. Equity hedge funds experienced net outflows of $7.9 billion during the last quarter, with total assets managed by the group ending the third quarter at $919.6 billion. The outflows were mainly attributable to fundamental value funds, which suffered net withdrawals of $4.4 billion in the third quarter.

“The capital raising environment continues to be challenging, with geopolitical and macroeconomic factors motivating allocations for some investors while contributing to complacency and hesitation for others. It is likely that sophisticated investors will proceed with strategic allocations in coming quarters which improve overall portfolio-expected returns through efficient, opportunistic long-short exposures,” said Heinz.

Image by rawpixel from Pixabay

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

Our newsletter is sent once a week, every Friday.

Eugeniu Guzun
Eugeniu Guzun
Eugeniu Guzun serves as a data analyst responsible for maintaining and gatekeeping the Nordic Hedge Index, and as a journalist covering the Nordic hedge fund industry for HedgeNordic. Eugeniu completed his Master’s degree at the Stockholm School of Economics in 2018. Write to Eugeniu Guzun at eugene@hedgenordic.com

Latest Articles

Benchmark-Plus High-Yield Investing at LD Pensions

Stockholm (HedgeNordic) – Danish pension fund LD Pensions manages two separate pension funds, each with different investment horizons. While the allocation across equities, investment-grade...

Small-cap Equities: Entering a Sweet Spot?

By Krzysztof Janiga, CFA, Senior Equity ETF Strategist at SPDR: As valuation levels in large caps became extreme, the market rally began to broaden...

Rhenman’s Healthcare Fund Transitions to Article 8 Classification

Stockholm (HedgeNordic) – Since its inception in mid-2009, the Rhenman healthcare fund has focused on investing in healthcare companies, which contribute to at least...

The ART of Finding Right Tails

Stockholm (HedgeNordic) – Philosopher Nassim Nicholas Taleb coined the term ‘Black Swan’ to describe the tendency to underestimate the likelihood of extreme, hard-to-predict events,...

Cevian Acquires Stake in Swiss Insurer

Stockholm (HedgeNordic) – Swedish activist investor Cevian Capital has unveiled a 3.12 percent stake in Swiss insurer Baloise Holding AG. The stake is valued...

Nordic Hedge Funds Sustain Momentum

Stockholm (HedgeNordic) – Following its strongest first quarter in 15 years, the Nordic hedge fund industry sustained momentum into April. As reflected by the...

Allocator Interviews

Latest Articles

In-Depth: High Yield


Request for Proposal

- Advertisement -