22/01/2018
Hedge funds post inflows of USD113.5bn in 2017
Asset base for the industry grew by US$219.0 billion in 2017 to US$2.41 trillion – the highest growth in AUM since 2014 with US$113.5 billion of the gain in assets attributed to investor inflows and US$105.5 billion attributed to performance-based gains, according to Eurekahedge. This compares with an AUM decline of US$20.1 billion in 2016 where investor redemptions stood at US$55.1 billion while performance -based gains came in at US$35.1 billion.AUM for the North American hedge fund industry reached a record high of US$1.63 trillion. Investor subscriptions for 2017 year-to-date stood at US$66.8 billion, with US$67.3 billion of performance-based gains recorded over the same period of time.Hedge funds were up 8.25% for the year – almost 79% of fund managers are in positive territory for the year while another 19% have outperformed the MSCI ACWI Local Index which was up 17.55% in 2017. Back in 2016, only 58% of the managers were in the green though 25% of managers had outperformed the MSCI ACWI Local Index.Fund closures outpaced launches for the second consecutive year with 555 funds shutting down in 2017 compared to 489 new launches. In 2016, 769 funds liquidated while 700 launches were recorded.The average performance fees charged by hedge funds that launched in 2017 stands at 17.11%, up from 2016’s 16.52% figure and is the highest since 2011. On the other hand, average management fees has declined to 1.26% this year from 1.41% in 2016.Billion dollar hedge funds recorded strong investor interest as of 2017, with net inflows totalling US$64.1 billion while the sub-billion dollar club has accounted for US$49.4 billion in inflows as investor appetite for hedge funds continues to improve.
