Net inflows into hedge funds totaled $9.5 billion in the second quarter and a total of $23.3 billion for the first six months of the year, according to just-released data from Hedge Fund Research Inc.
Volatility in the second quarter negatively affected aggregate hedge fund performance, according to an HFRI report. The return of the HFRI Fund Weighted Composite index was -2.5 %, which dropped total industry assets to $1.65 trillion as of June 30, down 1.2% from $1.67 trillion as of March 31.
HFRI researchers said in the report that investors continued to favor large hedge funds, with 93% of the net inflow in the second quarter going to hedge funds managing more than $5 billion. That group of funds collectively manages about 60% of total industry assets, according to the HFRI report.
“The current environment in the hedge fund industry continues to be dominated by investor preference for robust fund infrastructure, encompassing enhanced liquidity and transparency,” said Ken Heinz, HFRI’s president in the report. “Investors have exhibited strong interest in products such as UCITS III-compliant funds and separately managed accounts, as well as in the larger funds in the industry,” Mr. Heinz added.
Hedge funds of funds experienced net outflows of $2 billion in the second quarter, with 31% of funds of funds seeing net inflows during the period. By contrast, 59% of single-strategy and multistrategy hedge funds had positive inflows in the three-months ended June 30.