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Hedge funds lure biggest inflow in seven years in first quarter, data provider says

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Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., January 25, 2022. REUTERS/Brendan McDermid

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NEW YORK, April 22 (Reuters) – Investors poured $19.8 billion into hedge funds in the first quarter, the biggest inflow of money since the second quarter of 2015, lured by gains some funds are posting amid volatile markets, according to data provider HFR.

Almost $13 billion flew into event-driven hedge funds, mainly to special situation funds and distressed assets, HFR said.

Still, total hedge fund capital remained roughly flat from December, at $4 trillion, as performance of equity and event-driven funds was poor in the first quarter.

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Both strategies pushed the industry’s total assets down 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 increasing their commitment to funds combining effective, volatility-positive, capital preservation with managers offering opportunistic exposure to interest rate and inflation trends, with these effectively complementing existing portfolio holdings and duration,” said Kenneth J. Heinz, president of HFR.

Record net inflow of money occured despite hedge funds ending the first quarter of this year 0.78% down, the HFRI Fund Weighted Composite Index showed, but outperforming the S&P index, which declined 4.60%. read more

Macro hedge funds, however, which bet on macroeconomic trends, rose 6.8% in the quarter, as they navigated well amid highly volatile markets.

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Reporting by Carolina Mandl; Editing by Toby Chopra

Our Standards: The Thomson Reuters Trust Principles.

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