Hedge fund strategies enjoy record first quarter
Net flow of assets into hedge funds for the first quarter of this year at $6.9bn (e8bn), was the biggest since the first quarter of 1998, according to the latest figures from TASS, the hedge fund database group.
While the investment came across the board in hedge fund styles, TASS notes that directional strategies such as long/short equity, distressed and global macro, alongside volatility led strategies (convertible arbitrage, equity marker neutral) took new money at the fastest pace for the quarter.
Convertible arbitrage and equity market neutral strategies had their largest inflows of assets on record, surpassing similar large inflows before the Long Term Capital Management/Russia market dive.
TASS says investors were most likely seeking refuge from the deteriorating equity markets and chasing high risk-adjusted and absolute returns enjoyed by volatility strategies.
Nevertheless, long/short equity still received the lions share of inward asset flows – 43% in the first quarter.
For the 12th successive quarter, however, assets have flowed out of emerging markets funds as a result of the slowing of the world’s major economies and the direct impact this has on export driven emerging markets.