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Investor Inflows, Performance Gains Boost Hedge Fund Industry AUM To All Time High

The global hedge fund industry continues to set, then break, new overall AUM records as investors pour more money into hedge funds and performance gains bolster industry AUM further. According to eVestment, investors added another +$12.03bn to hedge funds in August. Year to date (YTD) inflows sit at +$38.28bn. That new money coupled with performance gains throughout the year brought the overall hedge fund industry to a record $3.622trn AUM last month.

“This year has been a good one for hedge fund AUM growth, and August net flows and performance continued the trend,” said eVestment Global Head of Research and report author Peter Laurelli. “Inflows were well distributed, with about 57% of managers reporting to eVestment seeing inflows and overall there are many underlying metrics of hedge fund industry health.”

Laurelli notes that clearly some funds have seen outflows, highlighting the importance for investors of carefully selecting and monitoring the hedge funds with which they invest. “Outflows have absolutely existed last month and this year,” he said. “It can be a positive for the hedge fund business to have those assets unlocked and potentially redistributed broadly across the industry.”

Multi-Strategy hedge funds were the big asset winners in August among the primary strategies eVestment tracks, pulling in +$3.70bn in new investor money. This brings these funds’ year-to-date (YTD) inflows to +$23.62bn, making them the top asset gainer among primary strategies in 2021. However, with only 47% of Multi-Strategy funds reporting to eVestment seeing inflows, the success of the segment is not being felt by all Multi-Strategy funds.

Previous eVestment data showed concentrated outflows among a small number of Long/Short Equity funds, which pulled the overall segment into the red for net asset flows. That trend may be reversing as Long/Short Equity funds pulled in +$2.81bn in August. This marked these funds’ first net inflow since February 2021 and the largest monthly net inflow to these funds since November 2020. Long/Short Equity funds are still negative for asset flows YTD at -$11.82bn.

Macro hedge funds were the big asset losers in August among the primary strategies eVestment tracks, with investors pulling -$1.35bn from these funds. This continues a trend of unstable asset flows in this space during 2021, which has seen Macro being net positive and negative for monthly flows at different times throughout the year. As of August, Macro funds are just barely positive for asset flows YTD at +$190mn.

Assets continued to trickle into Managed Futures funds, with these funds pulling in +$950mn in August, bringing YTD inflows to +$9.99bn. This marks the sixth consecutive month of inflows for these funds and about 60% of funds reporting to eVestment have seen asset inflows this year.

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