North American hedge funds post new record inflow run

North America, home to the first ever hedge fund, cemented its position as the region of choice among allocators in May, as its managers recorded sixteen consecutive months of net inflows, according to Eurekahedge.

North American managers took $7bn net subscriptions last month.

Despite losing $9.3bn in performance, they now run $1.2trn, or two thirds of all assets in the industry.

It is the first time since July 2008, before the sharp end of the crisis, North American funds held so much.

Overall, the $1.82trn industry lost 1.24% in May, its first fall since mid-2010. Global shares dropped 2.52%.

The second next most popular region for hedge fund investors last month was Asia ex-Japan, which took in $1.4bn, but lost $900m through its investments.

European funds had $200m withdrawn, and lost a further $2.7bn on their holdings last month as continuing fallout from the sovereign debt crisis hit investor sentiment as well as markets.

The region’s products are the second most popular overall, holding $414bn across 3,585 funds. European assets are well above the $293.6bn trough in March 2009, but significantly below peak assets of $472.8bn in October 2007.

All of nine major strategies, except multi-strategy, took in net subscriptions in May, even though all but three (relative value, distressed debt and arbitrage) lost money on their investments.

The $2.2bn net new money global macro managers received in May, largely attributable to macroeconomic variables holding sway in capital markets presently, helped the strategy breach new peak assets of $122bn.

Event-driven, encompassing distressed debt and merger arbitrage, took in $2.8bn, the largest strategy flow for the month, and despite losing 0.4% of their value in May they also reached new record assets of $213.5bn.

Event-driven made more than 6% this year, by far the best performance. Only CTA funds are down so far in 2011. The industry

David Walker

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