Alternative Investment

Hedge Fund Assets Climb to New Record High

Managers recorded their strongest quarter since 2000 and investor confidence booms as global hedge fund industry assets soar to a high of $3.8 trillion within the first three months of 2021. This article in Hedgeweek covers the total hedge funds added within this three-month period and the contributing factors to this enormous growth.

Hedge funds added a total of $201 billion in the first quarter. This spike as recorded by Hedge Fund Research’s (HFR) main Fund Weighted Composite Index starts this quarter off as the strongest one since 2000. Assets managed by event driven hedge funds have topped more than $1 trillion for the first time ever while total event driven capital grew by $85.4 billion in Q1, bringing the overall sectors assets to $1.05 trillion.

Equity hedge fund capital surged to $1.16 trillion during January to March of this year. Investors added an estimated net $370 million of new capital within this period.

Commenting on the numbers, HFR president Kenneth Heinz notes how the industry successfully overcame a volatile trading environment to record its strongest Q1 return in more than two decades, commenting on the trading environment impacted by the new administration, but also volatility in cryptocurrencies, deep value equities from retail investors and trading platforms.

Meanwhile, total macro hedge fund capital increased $14.4 billion to $618.3 billion. As the biggest hedge funds continue to take the largest potion of quarterly allocations, mid-sized firms between $1 to 5 billion suffered a net outflow of $1.4 billion for the said quarter. Smaller firms less than $1 billion received estimated inflow of $1.14 billion collectively.

For more information about the surge in these numbers or what the beginning of the year can mean for hedge funds, read the article linked above and contact Steve Vlasak.