Saturday, April 20, 2024

Long/short equity draws first inflows in almost two years

Long/short equity hedge funds had their first month of net inflows in almost two years in February, signalling a possible turning point for the strategy.

The positive $1.5bn flow movement came amid better performance, with equity hedge funds leading performance so far in 2024 and single strategy hedge funds outperforming rivals charging pass-through in 2023 (see below).

January outflows from long/short equity mean the strategy has lost $5.2bn so far this year due to redemptions after losing more than $70bn in 2022 and 2023 combined, according to Nasdaq eVestment.

The hedge fund industry overall has seen net outflows of $15.6bn so far in 2024, almost all of which came in January.

February was a better month, which would have seen positive flows were it not for some “large and isolated redemptions taking place within the macro universe,” noted the data provider.

Multi-strategy and credit funds also saw renewed interest in February. Multi-strategy funds received over $1bn of net inflow, reversing the net outflow from the previous month and pushing the year-to-date net flow into positive territory.

Credit strategies also saw some net inflow after two months of net outflow.

The hedge fund industry saw its largest asset increase from performance since April 2021, with a gain of $74bn in assets under management in February 2024