Investors reconsidered putting their money in hedge funds, leading to a net outflow of $55 billion in assets, making it the largest capital flight from the industry since 2016, HFR said. He is a sharp turnaround from 2021, when the industry saw a positive net inflow of $15 billion.
High inflation, aggressive interest rate hikes by central banks and Russia’s invasion of Ukraine rocked global markets last year, and investors across all asset classes had to navigate a level of volatility that was not seen in years.
The investors they pulled $40.4 billion from hedge funds that buy and sell stocks, which is also the strategy that posted the worst performing numbers, losing $112.5 billion.
Despite the strong combined performance of the funds that traded on macroeconomic indicators, institutional players withdrew $15 billion from these funds, the data company said.
The only type of hedge fund strategy that saw investor money surge was the $4.3 billion that flew into event-driven M&A and credit funds.
The size of the hedge fund industry grew in the fourth quarter to $3.83 trillion, a quarterly increase of $44 billion, HFR said.
“Strategies that have demonstrated their ability to weather today’s extreme market volatility are likely to attract capital,” said Kenneth J. Heinz, president of HFR.
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