Growing investor confidence in hedge funds

Recent positive performance has strengthened investor confidence in hedge funds. From Q4 2015 to Q4 2016, the industry went through tough times and experienced 5 consecutive quarters of net outflows. This trend reversed beginning of 2017 with now a third quarter of net inflows. On a strategy level, credit and multi-strategy funds received most investor allocations. After 6 consecutive quarters of net outflows, also equity hedge strategies finally experienced net inflows again in 2017 Q3. CTAs have seen a quarterly net outflow in 2017 Q3, despite being the only leading strategy to record positive net flows in 2015 and 2016.

Total industry assets have increased by 7.4% since the start of 2017 and now stand at 3.4 trillion USD. Many hedge fund selectors still seem to be chasing performance: there’s a clear link between past performance and later net asset flows.

With reference to Preqin: Read more