The global hedge fund industry finally saw net inflows return to positive territory in the first quarter (Q1) of 2017 after five quarters of net outflows, according to data published Tueday by London, England-based Preqin.
Hedge funds recorded net inflows of US$19.7 billion in Q1. The combination of positive net flows and market performance combined to boost total industry assets by 3.2% during the quarter to US$3.35 trillion, the data provider for the alternative assets industry notes,
Macro strategy funds and event driven strategy funds recorded the largest net flows during the quarter, says Preqin, with positive net flows of US$11.1 billion and US$8.9 billion, respectively. Equity strategies saw US$10.0 billion of redemptions.
By geography, North America-based hedge fund managers based led the way with net inflows of US$19.9 billion. Europe was the only region to lose assets in Q1, Preqin says, with net outflows of US$8.5 billion.
"2016 was undeniably a difficult year for the hedge fund industry, with net outflows reflecting a reduced appetite for the asset class from institutions following a sustained period of low returns to investors since 2014," says Amy Bensted, head of hedge fund products, Preqin.
"However, following an extended run of improved performance since March 2016 — the 12-month return of hedge funds is 10.67% — investor sentiment seems to be improving in 2017, which is reflected by inflows over the start of the year," she adds.