Wednesday, June 12, 2024

HF flows positive in January as credit strats draw interest

Hedge funds started the year with narrow inflows after closing 2022 with major redemptions, according to eVestment.

Allocations outpaced withdrawals by $1.1bn globally, a small inflow but signalling a reversal from the $112.2bn which flowed out last year.

The data backs up Citco’s finding of small inflows and follows Man Group’s results last week which showed its active strategies were popular last year, driving a $3.2bn inflow overall across all products.

The two most popular strategies in 2022, multi-strategy and managed futures, started the year with the most inflows, according to eVestment.

Multi-strategy expanded $4.6bn on investor flows, a sizeable step towards the $6.2bn increase last year, while managed futures increased $3bn, half of last year’s $6.1bn.

Directional and relative value credit, $2bn and $1.1bn, were next in a sign of rising interest in credit strategies. More than half of credit strategies attracted money, reversing a long-running trend of low interest.

Long/short equity, by contrast, was least popular with a $5bn outflow to start the year.

“There were a few large allocations to long/short equity funds made to begin this year, almost all of which went to funds which performed relatively well in 2022,” reported eVestment.

“The totals are just not enough to offset broader redemptions, many coming from funds which did not perform well in a difficult 2022.”