Hedge fund industry assets hit a new peak of $2.702 trillion as of March 31, the seventh consecutive quarter of record-breaking net growth, according to new data from Hedge Fund Research.
Assets growth in the first quarter was 2.8%, up from $2.628 trillion as of Dec. 31, HFR said in its most recent research report.
The jump in aggregate hedge fund industry assets was the result of the combination of $26.3 billion in net inflows and $47 billion of net investment performance gains.
HFR noted that net inflows in the three-month period ended March 31 were the highest quarterly inflows since second quarter 2011 when net inflows totaled $32.5 billion.
If the current pace of new money entering the hedge fund industry continues for the remaining three quarters of 2014, net inflows for the calendar year will top $105 billion, making it the best year since 2007, when net asset growth totaled $195 billion, historical HFR data showed.
Hedge funds of funds experienced “a modest outflow of $375 million,” HFR's report said, “narrowly missing the chance to end a streak of 12 consecutive quarterly outflows dating back to (first quarter) 2011.”
One bright spot for hedge funds-of-funds managers was that aggregate investment performance gains of $1.6 billion in the first quarter pushed the industry total to $665.1 billion, up slightly from $663.1 billion as of Dec. 31.
Equity hedge fund strategies experienced the highest net inflows in the first quarter with $16.3 billion, followed by relative value strategies, $11.2 billion, and event-driven approaches, $4.1 billion. Macro hedge funds had net outflows of $5.3 billion, according to HFR tracking data.
In terms of investment gains during the three-month period, event-driven funds led other strategies with $19.5 billion, trailed by relative value hedge funds, $15.3 billion; equity hedge strategies, $10.7 billion; and macro funds, $1.5 billion.
