Global Hedge Fund Assets Climb to $3.17 Trillion in May, Large Multi-Strategy Funds Shine

Global hedge fund assets reached $3.17 trillion in May, up 1.37% compared to April. Investors poured an additional $23.7 billion into hedge funds in May, with performance gains of $19.3 billion making up the balance of increased hedge fund assets.

With May’s $23.7 billion in new assets, hedge fund investors have added an estimated $65.8 billion to the industry in the first five months of 2015. While this is below the torrid pace of asset inflows at this point last year – $93.6 billion – it’s higher than the average year-to-date flows of $45.9 billion for the same period across the five prior years, indicating continued investor interest in hedge funds.

Other interesting points from the report include:

· Multi-strategy funds continued to lead the industry in terms of new assets in May, with investors adding an estimated $5.4 billion to these funds during the month. With a year-to-date total of $34.3 billion, multi-strategy funds captured 52% of the hedge fund industry’s net inflow so far in 2015. Large multi-strategy funds – those with more than $1 billion in assets – have dominated this universe’s inflows, capturing about 95% of the new assets.

· Investor flows to equity focused strategies have begun to accelerate after a mixed start to the year. Inflows in May of $7.5 billion were the largest in nearly a year, and followed a $5.8 billion inflow in April, indicating renewed investor interest in these funds.

· After a slowdown in April, investor allocations to managed futures strategies increased in May. The universe took in an estimated $2.0 billion during the month, bringing YTD total inflow to $10.6 billion. YTD 2015 inflows are the highest since 2011 ($11.9 billion through May of that year).

· Macro hedge funds enjoyed a fourth consecutive month of positive and rising investor sentiment in May. The $5.1 billion allocated to macro strategies in May was the universe’s largest monthly inflow since February 2013.

· After a string of nine consecutive months of net outflows, emerging market hedge funds enjoyed their second consecutive month of inflows in May, up $1.76 billion during the month. Much of the renewed interest appears directed at funds focused on China.

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