Hedge Fund Assets Stand at 16-Month High of US$1.5 Trillion

TrimTabs Investment Research and BarclayHedge reported that the hedge fund industry posted an estimated inflow of US$16.6bn, or 1.1% of assets, in February 2010. Hedge funds showed a positive return in each of the past 12 months, and industry assets stand at a 16-month high of US$1.5 trillion.

“Hedge funds sport a stellar win streak, and the average fund outperformed the S&P 500 last year,” said Sol Waksman, founder and president of BarclayHedge. “Money is chasing performance.”

Distressed securities funds posted the biggest inflow (4.2% of assets) in February. Emerging markets funds lost money (0.1% of assets) for a second straight month, despite returning 65.6% in the past year. Funds of hedge funds continued to perform poorly.

“Funds of funds have underperformed the industry by a fat 13.9% in the past year,” said Vincent Deluard, global equity strategist at TrimTabs. “And as a consequence, they continue to bleed assets – US$17.4bn in the past three months.”

In a research note, TrimTabs investigates hedge fund flows and returns by country. Canadian and Chinese funds performed the best in the past decade, while funds in Japan and Switzerland performed the worst. Britain boasts the best returns for emerging markets funds.

“The US portion of the industry sank to 60% in the past 10 years,” Deluard noted. “We’re losing market share. The hedge fund industry has gone global.”

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.


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