Hedge Fund Assets Fall 2.5% in August, Reversals in Some Popular Segments, Asia Funds Take Hit

While investors added $10.5 billion to hedge funds in August, performance decreases of about $78.4 billion sent overall global hedge fund industry AUM down 2.5% to $3.05 trillion last month, according to the just-released August 2015 eVestment Hedge Fund Asset Flows Report. Investor confidence in hedge funds appears to be strong, with investors plowing a total of $74.7 billion into the funds year-to-date, although some popular fund types have seen reversals in asset flows from earlier in 2015.

Some interesting points from the new report, according to report author and eVestment Vice President and Head of Research Peter Laurelli, include:

· While there have been multiple reversals of apparent investor preferences throughout 2015, one consistent theme has been investors’ interest in multi-strategy products. August’s inflows of $6.6 billion into multi-strategy hedge funds brought YTD inflows to the segment to $48.6 billion.

· Managed futures fund flows look set for their first negative month since December. What appeared to have been a nearly flat month of flows in July was revised firmly higher, however products currently reporting to eVestment indicate redemptions of $3.2 billion in August.

· Investors added money to event driven strategies in August, an instance of investors deviating from prior months’ actions, when they had been pulling money out of this segment. The $1.7 billion inflow followed elevated outflows in July, which was the universe’s fourth monthly redemption in the last five months.

· The recent two month string of inflows into commodity strategies ended in August with investors redeeming nearly $530 million. YTD flows are only slightly negative, however recent performance losses make it unlikely investors will return in a big way in the near term.

· Following elevated losses in China, investors appeared to take a step back from funds investing in Asia in August. Following six consecutive months of inflows when investors allocated $7.5 billion into Asia-focused funds, August’s slight redemption of $540 million is significant because it could signal the beginning of more outflows to come as the universe has posted elevated losses for three consecutive months.

· Despite the redemptions from funds investing in Asia, funds domiciled in Asia continued to see inflows in August and have received and estimated $12.3 billion in 2015.

To download a copy of this latest report, please click here.