- Advertisement -
- Advertisement -

Related

Hedge Fund Assets Nearing $4 Trillion

Report: Alternative Fixed Income

- Advertisement -

Stockholm (HedgeNordic) – Total hedge fund assets reached an estimated $3.96 trillion at the end of the second quarter, increasing $360 billion from the start of the year, according to Hedge Fund Research. Industry assets increased by more than $1 trillion over the trailing five quarters since falling below the $3 trillion-mark during the first quarter last year.

Strong returns rather than inflows of fresh capital accounted for a large portion of the industry’s asset growth. As measured by the HFRI Fund Weighted Composite Index (FWC), the global hedge fund industry enjoyed its strongest first half performance in a calendar year since 1999, with the industry gaining 10.1 percent in the first half of 2021. The HFRI FWC advanced 27.5 percent over the 12 months through the end of June.

Despite performance-based asset gains accounting for most of the industry’s asset growth, the second quarter of this year marked the fourth consecutive quarter of net asset inflows for the hedge fund industry, according to Hedge Fund Research. The hedge fund industry attracted an estimated $12.3 billion in net asset inflows for the second quarter, bringing total net inflows over the trailing four quarters to $34.1 billion.

“The surge in global hedge fund capital accelerated through 2Q21 with a combination of inflows and record performance gains driving powerful growth, increasing total industry capital by over $1 trillion since the onset of the global coronavirus pandemic, and approaching the milestone of $4 trillion.”

Kenneth J. Heinz, President of HFR.

“The surge in global hedge fund capital accelerated through 2Q21 with a combination of inflows and record performance gains driving powerful growth, increasing total industry capital by over $1 trillion since the onset of the global coronavirus pandemic, and approaching the milestone of $4 trillion,” says Kenneth J. Heinz, President of HFR. “Recent growth has been driven across a broad continuum of strategies and macroeconomic portfolio scenarios, including balancing economic reopening/reflation trades with sharp reversals in these trends, including risks of additional virus variants, falling interest rates and possibilities for less robust economic growth over the intermediate term.”

“Leading global institutions are continuing to make and expand allocations to hedge funds as an ideal portfolio mechanism to opportunistically participate in these powerful trends while maintaining tactical flexibility and adjusting to the fluid macroeconomic environment.”

Firms overseeing more than $5 billion in assets under management received net inflows of $5.5 billion of the $12.3 billion total in the second quarter. Mid-sized firms managing between $1 billion and $5 billion attracted a collective $5.0 billion of net inflows for the quarter, while firms managing less than $1 billion collectively received an estimated $1.8 billion.

“Funds which have demonstrated their ability to navigate this market paradigm are likely to lead industry growth in 2H21.”

“Leading global institutions are continuing to make and expand allocations to hedge funds as an ideal portfolio mechanism to opportunistically participate in these powerful trends while maintaining tactical flexibility and adjusting to the fluid macroeconomic environment, including the increased influence of retail trading platforms on equity market prices and volatility,” adds Heinz. “Funds which have demonstrated their ability to navigate this market paradigm are likely to lead industry growth in 2H21.”

 

Photo by Thomas Galler on Unsplash

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

A Smarter Governance Model for Hedge Funds

By Sofia Beckman – North House: Over the past two decades, hedge funds have faced an increasingly complex regulatory landscape. Each wave of new...

Outsourcing vs. Insourcing: Key Strategic Choices for Asset Managers

The financial landscape is constantly evolving, presenting asset managers with a wide range of complex decisions regarding technology, operational efficiency, regulation, and more. In...

Investor relations in 2024/2025

By Hannah Smith – Edgefolio: Fund marketing and investor relations are two sides of the same coin. As with most subscription sales, there is...

The Challenge of Oversight and Control

By Carl-Fredrik Svensson, CEO – Daymi: Good oversight is becoming increasingly harder as the industry continues to grow with more outsourcing partners, new software...

Future-Proofing Risk and Portfolio Management with AI and Gen AI

“As the product lead for MSCI, I am naturally biased, but I believe the AI is transforming at MSCI the analysis of risk. Using...

BNP Paribas Ramping Up Nordic Alternatives Push

BNP Paribas is continuing to expand its presence in the Nordics, leveraging its extensive resources and expertise to provide a comprehensive range of services...

Allocator Interviews

In-Depth: Megatrends

Voices

Request for Proposal

- Advertisement -