Hedge fund industry assets hit a new high of $3.211 trillion as of Dec. 31, the sixth consecutive quarterly peak of assets under management, data released Friday by Hedge Fund Research showed.
Combined asset growth for hedge funds and hedge funds of funds for periods ended Dec. 31 was 1.9% for the quarter and 3.3% for the year.
The breakdown of total asset growth of $59 billion in 2017 was 88% from investment gains and 12% from net inflows.
Fourth-quarter net inflows totaled $6.9 billion, the highest quarterly net inflows since the second quarter of 2015, up sharply from $1.7 billion in the third quarter and from $18.7 billion of net outflows in the fourth quarter of 2016, HFR data showed.
In a year-to-year comparison, 2017 featured positive net inflows of $9.8 billion vs. heavy net outflows of $70.2 billion in 2016.
In the quarter ended Dec. 31, HFR data showed that the event-driven hedge fund strategy category received the highest net inflows of $6.9 billion, with $9.2 billion of performance gains. Relative value hedge funds followed with $1.3 billion of net inflows and investment gains of $8.9 billion. Macro funds brought in net inflows of $700 million combined with $11.5 billion of investment growth, while equity hedge funds had $2 billion of net outflows and the highest investment gains among HFR's hedge fund strategy categories, at $22.5 billion.
Hedge funds-of-funds assets increased 1% in the quarter and 2% in the year ended Dec. 31 to $645.6 billion.
Net outflow from the hedge funds-of-funds universe was $3 billion in the quarter ended Dec. 31; $21.4 billion in 2017; and $26.4 billion in 2016.
In the year ended Dec. 31, the total number of hedge funds grew by 79 to 8,335 funds, while the universe of hedge funds of funds declined by 129 funds to 1,419.
"2017 was a historic year in the hedge fund industry that included advancements in both the core and emerging areas of the industry and (with) combined record capital levels … it is likely the hedge fund industry will continue its powerful expansion … throughout 2018," said Kenneth J. Heinz, HFR's president, in a news release companying the company's latest data release.
