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Hedge fund assets reach record highs

16 May 2014


Total AuM reached new all-time high of $2.938trn in April

Read more: eVestment hedge funds

Hedge fund assets reached a new all-time high in April 2014, surpassing their prior peak set in Q2 2008 before the height of the financial crisis, according to eVestment's April hedge fund asset flows report.

Total hedge fund assets under management (AuM) rose 0.42% to $2.938trn despite minor performance-related declines.

Investors allocated $17.9bn to hedge funds in April, bringing the total figure year to date to $68.4bn. This surpassed the total inflow of $61.66bn for the whole of 2013.

Investors continued to show preference for equity strategies over credit, although equity fund flows were noticeably lower in April than over the prior three months.

"This may be a sign that recent performance losses are weighing on investor sentiment," said the eVestment report.

Year-to-date inflows into equity strategies of $48.3bn are nearly triple of that for the whole of 2013.

Credit fund flows were positive, but near flat for the second consecutive month.

At $952.82bn, credit fund AuM is at an all-time high, having surpassed its pre-crisis peaks from 2010.

"Persistent growth [in credit fund inflow] has been driven by the structural shift in the industry’s investor base as institutions have overtaken fund of funds as primary investors and shown an interest in alternative exposures to familiar markets," the report said.

Event-driven strategies continued to receive large new allocations. Despite elevated losses in March and April, activist funds still received the highest allocations, "making them favourites in the space".

"It is important to remember however that current inflows are the results of decisions made over the past several months and may not reflect current investor sentiment to the strategies," the report added.


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