Hedge funds on track to outperform 2020 as continued capital inflows boost industry coffers
Articles by: Richey May, Jul 22, 2021
Strong strategy gains have been renewing investor faith in the sector, with allocator’s flows swelling an extra $12.01 billion into hedge funds during May. Those inflows have brought year-to-date new capital to $39.12 billion, this increase has totaled industry assets under management to $3.57 trillion as of the end of May. This article in Hedgeweek covers the total hedge funds gains and the factors contributing to the boost of industry coffers to almost $3.6 trillion in the run-up to 2021’s midway point.
Recent research published by eVestment shows hedge funds overall gained 1.48% on average during May. This has helped drive 2021’s year-to-date returns to 9.05%. Research shows the second half of the year is in great condition with hedge funds’ full-year returns for 2020 finishing at some 11.05%.
From the two-thirds of hedge funds reporting to eVestment May of 2021, their numbers on record have been the highest percentage seeing net inflows since May 2016.
Multi-strategy hedge funds have attracted the strongest interest in 2021, with investors pledging $4.49 billion in May, bringing net inflows total this year to more than $20 billion. Macro funds have brought in $3.48 billion last month, bringing year-to-date inflows to $5.62 billion. Macro managers were May’s best performers on a monthly basis showing January-to-May of 2021 returns at 5%.
On the other side investors drew $1.19 billion out of long/short equity strategies during May, Peter Laurelli, eVestment’s global head of research describes as the “one major outlier”. The $9.40 billion pulled out from long/short equity hedge funds is staying concentrated among underperformers, the long/short equity hedge fund universe is still remaining positive.
For more information about the wide-margin performance can mean for hedge funds towards the second half of 2021, read the article linked above and contact Steve Vlasak.