Hedge Fund Assets Stay Above $3.0 Trillion in January as Redemptions Slow

The latest report on hedge fund asset flows from industry data provider eVestment showed that over $5 billion was withdrawn from the hedge fund industry’s largest firms in January 2017. Still, steady performance gains in 2016 managed to slow the pace of continued investor outflows which helps the global hedge fund capital stay above the $3 trillion milestone.

For the month of January, hedge funds saw $5.2 billion in net outflows, according to eVestment's report. By comparison, investors removed $19.3 billion in January 2016.

Despite improved overall performance when compared to the start of last year, the industry had its fifth consecutive monthly outflows in January, the longest streak since six months of outflows ending December 2011.

All but one hedge fund strategy in eVestment's hedge fund universe experienced net outflows in January, with managed futures funds losing the most, -$3.67 billion, followed by event driven and relative value credit funds which also saw big outflows in January 2017, -$2.81 billion and -$2.69 billion respectively.

The sole strategy to attract positive net inflows for the month were multi-strategy funds, which added $10.3 billion, eVestment’s research showed.

eVestment researchers noted in the report: “Despite flows being negative, the level of redemptions is not concerning, and far, far, better than the industry’s start last year when investors removed $19.3 billion in January 2016.”

“After the industry endured its most difficult period of redemption pressure in 2016 since the end of the financial crisis, the early months of 2017 will give a good indication of sentiment we should expect for the year,” they added.