Hedge Fund Industry Had That Sinking Feeling In Q1

Tom Burroughes

2 May 2016

Investors pulled $14.3 trillion from the world’s hedge fund industry in the first three months of this year, continuing from the $8.9 billion of net outflows seen in the final three months of 2015, according to research firm .

Total assets under management held by the industry dropped 0.48 per cent in the quarter, standing at $3.13 trillion.

As far as individual strategies were concerned, commodity trading advisors and multi-strategy funds were the only strategies that saw net inflows, gaining $13.7 billion and $12.8 billion respectively. Equity strategies funds saw net outflows of $9.7 billion in the quarter, while credit strategies funds saw the largest outflows of $11.9 billion.

A survey by the firm, carried out in November last year, found that more investors (32 per cent) plan to reduce their exposure to hedge funds in 2016 than plan to increase it (25 per cent). This is the first time this situation has occurred since Preqin started tracking this data in 2009.

Preqin’s survey of investors also revealed that 29 per cent of investors planned to increase their exposure to CTAs in 2016, among the highest proportion of any leading strategy.

Only 8 per cent of investors planned to increase their exposure to credit strategies funds, the lowest of any leading strategy, compared with 15 per cent that planned to decrease their exposure.