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Hedge Funds

Hedge fund assets hit another record, but see outflows

The hedge fund industry hit a record high for the eighth consecutive quarter with $3.326 trillion of assets under management as of June 30, data released Thursday by Hedge Fund Research showed.

Assets in the second quarter were up 0.7% from the quarter ended March 31 and up 4.4% from a year earlier.

In this most recent quarter, however, the hedge fund industry experienced its first quarterly outflows — $3 billion — since the first quarter of 2017, HFR data showed. Still that was offset by performance gains of $23.7 billion.

By strategy, equity hedge funds attracted the most inflow with $2.4 billion and performance gains of $9.2 billion.

The other three hedge fund strategy categories HFR tracks had outflows in the quarter ended June 30:

  • Relative value funds had outflows of $1.1 billion and $2.8 billion in performance gains.
  • Event-driven funds experienced $1.5 billion of outflows and investment gains of $11.4 billion.
  • Macro funds had outflows of $2.8 billion and a slight performance gain of $300 million.

"Performance and capital flow trends shifted and evolved in (the second quarter) as managers and investors adjusted to the impact of trade-tariff financial-market volatility and continued U.S. strong economic growth," Kenneth J. Heinz, HFR's president, said in a news release accompanying HFR's data release.

Mr. Heinz added the combination of trade-tariff volatility and strong corporate earnings is contributing to a continued "expanded opportunity" for specialist, long/short hedge fund investing in technology, manufacturing, media and retail sectors.