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Hedge Fund Industry Begins 2020s With Record Assets Under Management

Industry tracker HFR published new data today suggesting that the global hedge fund industry is now managing $3.32trn, the highest level since HFR began tracking assets under management data. The data represents a quarterly increase of over $80bn and surpasses the previous record set in Q2 2019 of $3.24trn.

The increase in assets under management can be attributed to performance gains driven by equity markets, as investors actually redeemed a net $13.6bn in Q4 2019, with more than half of that - $8bn - coming from Relative Value Arbitrage.

The HFRI Fund Weighted Composite Index advanced +3.5% in Q4 2019, bringing the full year gain to +10.4%, the strongest calendar year of performance since 2009.

“The hedge fund industry concluded a historic decade of growth, which began in the aftermath of the financial crisis and saw total capital double in size, as the strongest performance in a decade propelled industry capital to a new milestone,” stated Kenneth J. Heinz, President of HFR. “While 2019 was dominated by risk-on sentiment and upside volatility, many of the risks for which managers have strategically positioned remain as potential catalysts for dislocations. As the industry enters the 20's, its role within financial markets continues to evolve, not only for its powerful performance and risk management considerations, but also as a provider of liquidity, specialized financing, and advocacy and activism for shareholders within both politics and social campaigns. The leadership role of the industry will likely continue evolving and expanding along with these and other dynamics in coming years.”

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