FOR IMMEDIATE RELEASE
Hedge Funds Post Inflow of $6.6 Billion in December 2010, Sixth Straight Inflow;
Risk Appetite Soaring: Emerging Markets Hedge Funds Receive $5.8 Billion, Largest Inflow since July 2008
New York, NY – February 7, 2011 – TrimTabs Investment Research and BarclayHedge report that the hedge fund industry posted an estimated inflow of $6.6 billion (0.4% of assets) in December 2010, the sixth straight inflow. Industry assets stand at $1.7 trillion, the highest level since October 2008.
“The December inflow is very bullish for the industry because year-end redemptions typically produce an outflow in December,” said Sol Waksman, founder and President of BarclayHedge. “Additionally, about 50% of hedge fund managers will collect fees for their performance last year, a much larger share than 32% in 2009, and we estimate that industry revenue in 2010 clocked in at a hefty $53 billion.”
Risk appetite among hedge fund investors is soaring. Emerging markets funds hauled in $5.8 billion (2.5% of assets) in December, the largest inflow since July 2008, while macro funds took in $3.0 billion (2.6% of assets), the heaviest inflow of any hedge fund strategy, based on a percentage of assets. Meanwhile, fixed income funds attracted $2.5 billion (1.4% of assets), the eighth straight inflow.
“Macro funds hauled in $13.9 billion last year, which made them the most popular hedge fund strategy of 2010, even though they underperformed the S&P 500 by about 650 basis points,” explained Vincent Deluard, Executive Vice President of Research at TrimTabs. “But macro themes have dominated markets, and hedge fund investors count on macro managers to navigate extremely volatile currency markets. The bulk of last year’s macro inflow hit after the first leg of the European debt crisis erupted in May.”
Funds of hedge funds redeemed $1.3 billion (0.2% of assets) in December, the second straight outflow, and underperformed hedge funds by about 600 basis points in 2010. Commodity trading advisors (CTAs) hauled in $1.9 billion (0.7% of assets), the ninth inflow in 10 months, as soaring commodity prices have generated a great deal of interest in the space. Meanwhile, many hedge fund managers have set new high-water marks.
“More than 60% of the managers in our database have recovered from the losses they suffered in 2008,” noted Deluard. “While the S&P 500 still sits about 8% south of its year-end 2007 level, our Hedge Fund Index is up about 8%. Meanwhile, flows in the past five months rival those of the pre-crisis period. Hedge funds are on a tear, and continued aggressive investing is a huge plus for asset prices.”
The TrimTabs/BarclayHedge database tracks hedge fund flows on a monthly basis. The TrimTabs/BarclayHedge Hedge Fund Flow Report provides detailed analysis of these flows as well as relevant topical studies. Click here for further information.
BarclayHedge is a leading hedge fund data vendor and one of the foremost sources for proprietary research in the field of alternative investments. From its origin as a research specialist and performance measurement firm, BarclayHedge has developed complete client services as a publisher, database and software provider, and industry consultant.
TrimTabs Investment Research is the only independent research service that publishes detailed daily coverage of U.S. stock market liquidity--including mutual fund flows and exchange-traded fund flows--as well as weekly withheld income and employment tax collections. Founded by Charles Biderman, TrimTabs has provided institutional investors with trading strategies since 1990. For more information, please visit us here.