Opalesque Industry Update - Hedge funds declined 1.62% in February and were up 0.37% year-to-date with total AUM growth still in the green despite losses in February which eroded the solid gains in January. Investor redemptions stood at US$5.0 billion in February while performance-based losses of US$34.2 billion were recorded. Almost 35% of the fund managers are in the red for the year in what is turning out to be the toughest start to the year for fund managers since 2016. While hedge fund capital allocations were in the red for the month of February, investor subscriptions have favoured CTA/managed futures and event driven strategies which have seen inflows of US$0.8 billion each followed by long/short equities and arbitrage strategies with inflows of US$0.4 billion each. Hedge funds managing in excess of US$1 billion reported their highest monthly performance-based decline on record, totalling US$25.5 billion while net outflows of US$4.6 billion were recorded. In contrast, sub-billion dollar hedge funds have fared relatively better with outflows of US$0.3 billion and performance-based losses of US$8.6 billion. The Eurekahedge Billion Dollar Hedge Fund Index was down 1.77% in February, its steepest monthly loss on record since the infamous May 2010 flash crash when the index lost 2.01%. The US$264.3 billion CTA/managed futures mandated hedge funds reported their biggest monthly performance-based losses since June 2004, totalling US$19.4 billion in February bringing their 2018 year-to-date performance-based figures down to the red, with losses totalling US$9.2 billion. Meanwhile, investors allocated US$0.8 billion into the mandate during the month and US$3.9 billion year-to-date. The US$1.66 trillion North American hedge fund industry posted the steepest performance-based losses of US$25.9 billion among regional mandates during the month while investor redemptions of US$1.1 billion were recorded. Asset base for the North American hedge fund industry grew by US$23.5 billion over the year with most of this growth attributed to net investor inflows of US$18.2 billion year-to-date, while performance-based gains totalling US$5.3 billion were recorded over the same period. Asia ex-Japan mandated hedge funds posted the steepest decline among regional mandates during the month, down 2.30% with underlying Greater China and Indian hedge fund managers losing 3.49% and 1.76% respectively. Performance-based losses of US$1.8 billion were recorded while investors redeemed US$0.8 billion from the mandate during the month. The average performance fee charged by North American hedge funds jumped to 18.49% in 2017 from 17.60% in 2016, before dropping to a historic low of 14.17% as of January 2018. Currently, the average management fee charged by North American hedge funds stands at 1.38%. For more details, please refer to the 2017 Overview: Key Trends in North American Hedge Funds report. The Eurekahedge Crypto-Currency Hedge Fund Index declined 16.83% in February, bringing its year-to-date losses to 22.47%, barely ahead of the price of bitcoin which declined 26% in the first two months of 2018. |
Industry Updates
Hedge funds declined 1.62% in February (up 0.37% YTD) with total AUM growth still in the green
Tuesday, March 20, 2018
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