HFR: Hedge Funds Attract Largest Inflow in 7 Years in Q1 : HFR

NEW YORK: Investors poured $19.8 billion into hedge funds in the first quarter, the biggest inflow since the second quarter of 2015, lured by gains some funds are posting in volatile markets, according to the HFR data provider.

Nearly $13 billion was invested in event hedge funds, mostly special situation funds and distressed assets, HFR said.

Still, total hedge fund capital remained roughly flat from December at $4 trillion, as both equity and event funds performed poorly in the first quarter.

The two strategies brought down total industry assets by $76.2 billion in the quarter, while macro and relative value funds attracted $50.5 billion, HFR showed.

“Institutional investors are likely to continue to increase their commitment to funds that combine effective, volatility-friendly capital preservation with managers offering opportunistic exposure to interest rate and inflation trends, the latter effectively complementing the existing portfolios and duration,” said Kenneth J. Heinz, president of HFR.

Record net cash inflows came despite hedge funds ending the first quarter of this year down 0.78%, the HFRI Fund-Weighted Composite Index showed, but outperforming the S&P index, which fell 4.60%.

In contrast, macro hedge funds, which bet on macroeconomic trends, rose 6.8% in the quarter, navigating well in highly volatile markets.


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