Global Hedge Fund Assets Back Over $3 Trillion in May, But Just

Hedge fund industry assets climbed above $3 trillion for the first time this year in May as investors continued allocating to hedge funds, according to eVestment’s May 201 6 Hedge Fund Asset Flows Report released today. But at $3.014 billion, funds are barely above that threshold and market forces unleashed by the late June vote for the United Kingdom to leave the European Union could impact that number dramatically cautioned report author Peter Laurelli, eVestment vice president and global head of research

A few other interesting points from the report, according to Laurelli include:

· Leading up to June’s BREXIT vote, hedge funds domiciled in Europe saw assets fall $3.3 billion while funds with Europe as an investment focus saw assets fall by $1.66 billion.

· Interest in commodity funds was positive again in May. Investors added $1.2 billion during the month, the 10th month in the last 12 with positive investor sentiment.

· Event driven funds are in the midst of significant redemption pressures, persisting since the end of 2014. In the 1.5-year span ending May 2016, investors removed $45.1 billion from event driven strategies. The current streak of six consecutive monthly outflows (and 14 in the last 18) is by far the worst period for universe outside of the financial crisis.

· Activist hedge funds reporting to eVestment, a subset of the event driven universe, saw slight net inflows of $73 million in May, yet for the year have experienced aggregate redemptions near $2 billion.

· Negative sentiment toward funds investing in Asia continued into May, the sixth consecutive month during which investor sentiment has been negative.

· Redemptions from China-focused funds reporting to eVestment were $164.5 million in May, much less than the level seen in March, and slightly less than the redemptions in April.

To download a full copy of the report, please click here.