FAIRFIELD, IOWA JUNE 29, 2022
Hedge fund redemptions slowed somewhat in April to $22.40 billion, 0.44% of industry assets, according to the Barclay Fund Flow Indicator published by BarclayHedge, a division of Backstop Solutions.
A $131.83 billion trading loss during the month brought total hedge fund industry assets to nearly $5.11 trillion as April ended.
“Concerns regarding whether the Fed will have to raise rates high enough to create a recession in order to get inflation under control added to investor anxieties caused by the Russia-Ukraine conflict, volatile equity markets, rising interest rates, and soaring energy and food prices,” said Ben Crawford, Head of Research at BarclayHedge. “With trading losses hitting many hedge fund subsectors, a number of investors started looking for alternatives elsewhere.”
Most hedge fund subsectors experienced redemptions in April. Subsectors swimming against the redemption current to post inflows in April included Multi-Strategy funds, adding $6.84 billion, 1.00% of assets, Equity Long/Short funds, with $2.15 billion in net inflows, 1.27% of assets, Merger Arbitrage funds, bringing in $848.16 million, 0.83% of assets, Option Strategies funds, adding $815.53 million, 1.47% of assets, and Distressed Securities funds, with $51.45 million in inflows, 0.32% of assets.
Subsectors on the larger redemption side of the ledger in April included Fixed Income funds, with $13.29 billion in redemptions, 1.35% of assets, Equity Long Bias funds, shedding $4.44 billion, 1.22% of assets, Emerging Markets – Global funds, with $3.27 billion in outflows, 1.24% of assets, Equity Long-Only funds, with $2.65 billion in redemptions, 0.63% of assets, and Sector Specific funds, with $2.17 billion in outflows, 0.41% of assets.
The managed futures industry fared better in April, adding to assets for a third consecutive month with $4.99 billion in inflows. Three of four CTA subsectors experienced inflows for the month. Systematic CTAs brought in $4.89 billion, 1.49% of assets, while Discretionary CTAs added $323.6 million, 1.71% of assets, and Multi Advisor Futures Funds saw $322.05 million in inflows, 2.17% of assets.
The only managed futures subsector experiencing net redemptions in April was Hybrid CTAs, with $221.61 million in outflows, 1.10% of assets.
12-Month Flow Trends
For the 12 months through April, the global hedge fund industry experienced $87.21 billion in inflows. A $211.06 billion trading loss over the period brought total industry assets to a $5.11 trillion figure as April ended, down from $5.14 trillion at the end of March but up from $4.27 trillion a year earlier.
Multi-Strategy funds remained the leader among subsectors experiencing 12-month inflows in April, bringing in $50.86 billion over the period, 12.64% of assets. Sector Specific funds saw $20.74 billion in inflows, 6.11% of assets, Balanced (Stocks & Bonds) funds brought in $16.20 billion, 2.77% of assets, Merger Arbitrage funds added $12.08 billion, 14.06% of assets, and Equity Long-Only funds saw $7.17 billion in inflows, 2.99% of assets.
Hedge fund subsectors experiencing the largest 12-month redemptions included Emerging Markets – Global funds with $14.01 billion in outflows, 7.30% of assets, Macro funds shedding $11.01 billion, 5.54% of assets, Equity Long/Short funds with $5.00 billion in redemptions, 2.97% of assets, Equity Long Bias funds with $4.40 billion in outflows, 1.18% of assets, and Emerging Markets – Latin America funds which saw $1.64 billion exit, 14.35% of assets.
Over the 12-month period through April, the managed futures industry experienced $5.49 billion in inflows. A $46.58 billion trading profit over the period contributed to the $380.59 billion in total CTA industry assets, up from $339.17 billion a year earlier.
All four CTA subsectors posted 12-month inflows through April, led by Discretionary CTAs with $3.32 billion in inflows, 22.37% of assets. Multi Advisor Futures Funds added $1.74 billion, 14.77% of assets, Hybrid CTAs brought in $1.24 billion, 7.02% of assets, and Systematic CTAs saw $856.72 million in inflows, 0.28% of assets.
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Backstop’s mission is to help the institutional investment industry use time to its fullest potential. We develop technology to simplify and streamline otherwise time-consuming tasks and processes, enabling our clients to quickly and easily access, share and manage the knowledge that’s critical to their day-to-day business success. Backstop provides its industry-leading cloud-based productivity suite to investment consultants, pensions, funds of funds, family offices, endowments, foundations, private equity, hedge funds and real estate investment firms.
BarclayHedge, a division of Backstop, currently maintains data on more than 6,900 hedge funds, funds of funds and CTAs. Institutional investors, brokerage firms and private banks worldwide utilize BarclayHedge indices as performance benchmarks for the hedge fund and managed futures industries.