Nearly 45 per cent of hedge fund saw inflows in October but overall outflows continued for eighth consecutive month.
The balancing act of asset inflows and outflows worked against the hedge fund industry again in October, with investors redeeming USD6.20 billion from the industry, according to the just-released October 2019 eVestment Hedge Fund Asset Flows Report.
While 45 per cent of funds did experience inflows last month, the overall asset outflows in October marked the eighth consecutive month of outflows for the industry. The last time the industry experienced this many consecutive months of outflows began in Q3 2008 and persisted until April 2009.
Overall hedge fund industry AUM stood at USD3.258 trillion in October, according to the new report.
Managed Futures funds turned around a string of investor redemptions from earlier this year beginning in August and brought in an additional USD2.55 billion in new AUM in October, making these funds the big asset winners among primary strategies in October. That momentum hasn’t been enough yet to turn around negative flows of -USD6.78 billion year to date (YTD).
Other primary strategies that were in the green for asset flows in October were Relative Value Credit, Directional Credit, Event Driven and MBS Strategies, although all of these funds’ inflows were below USD1 billion, and in the case of MBS Strategies, barely positive at +USD90 million.
Long/Short Equity funds saw continued large asset outflows in October at -USD4.84 billion. 3Q 2019 Long/Short Equity outflows totalled -USD15.10 billion and these funds have seen -USD40.91 billion in outflows YTD.
Macro funds also saw big outflows in October, with -USD2.68 billion fleeing these strategies in October and -USD23.21 billion YTD.
The elevated redemption pressures facing Emerging Markets products in the last two months subsided a bit in October. This is not because redemptions broadly abated during the month, but more because some new allocations were made to China equity products and global EM credit.