- Advertisement -
- Advertisement -

Related

Hedge Fund Outflows 2016 Worst Year Since 2009?

Latest Report

This year’s Alternative Fixed Income report from HedgeNordic explores how institutional investors and asset managers are navigating this new reality, balancing yield and resilience amid shifting credit cycles, structural change, and evolving sources of return.

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

AllianzGI’s Impact Private Credit Strategy: Financing Change Without Compromise

Private credit has matured into an established asset class and is now evolving beyond traditional financing, offering opportunities to contribute to positive change. As...

ESG Remains Part of the “Credit Story” in Private Credit

ESG integration remains a standard component of private credit investing, particularly in Europe and among Nordic institutional allocators, but its momentum has slowed. Conversations...

From PDF to Platform: Why Governance Needs a System, Not a Folder

By Sofia Beckman – Co-founder, North House: “We manage billions with real-time systems,” one COO told me. “But our governance still lives in PDFs.”...

CABA Flex: End of Lifespan, Promises Fulfilled

About three years ago, Copenhagen-based fixed-income boutique CABA Capital was preparing to launch what would later become the first fund in its Flex series:...

Nordic Hedge Funds Maintain Momentum Towards Year-End

Nordic hedge funds are heading toward year-end with strong momentum, advancing 0.8 percent in October to extend their winning streak that began in May....

Gradually, Then Suddenly: Proxy P Extends Rebound

As Ernest Hemingway once observed, change happens “gradually, then suddenly.” For the team at renewables-focused asset manager Proxy P, a period of weak performance...

Allocator Interviews

In-Depth: High Yield

- Advertisement -

Voices

Request for Proposal

- Advertisement -
HedgeNordic
Privacy Overview

This website uses cookies so that we can provide you with the best user experience possible. Cookie information is stored in your browser and performs functions such as recognising you when you return to our website and helping our team to understand which sections of the website you find most interesting and useful.