Investor allocations to hedge funds are set to be “heavily outweighed” by redemptions in the coming weeks, amid a challenging backdrop for performance and flows, asset servicer Citco has warned.

Allocators continued to pour money into hedge funds last month, with net inflows reaching $400 million as $6.6 billion of allocations outweighed $6.2 billion of withdrawals. That came despite fewer than half of all hedge funds generating positive returns in February, according to data.

The hedge fund asset servicer, which has $1.8 trillion in assets under administration, noted that future trade dates point to a spike in net outflows to $12.6 billion in March.

“The current forecast for flows in the final month of the quarter continues to look challenging,” Citco noted in its monthly Hedge Fund update.

Overall, global macro and multi-strategy proved the most popular strategy type for hedge fund investors in February, each pulling in $300 million in net inflows, despite flat performances. In contrast, investors yanked $400 million out of event driven hedge funds despite the strategy gaining 3.3% last month.

Elsewhere, long/short equity hedge funds, as well as emerging market, hybrid and arbitrage-focused managers each registered small inflows of $100 million, while fund-of-funds strategies recorded $100 million of outflows.

On average, hedge funds administered by Citco were up 0.1%, though just 46% advanced into positive territory in February; a steep slide from the 78% of managers registering gains in January.

Recent market shocks stemming from the collapse of Silicon Valley Bank and the Credit Suisse sale to UBS has put portfolios on less secure ground, with bond market upheaval denting macro and CTAs’ performance, and the volatility in European financials buffeting directional equity positions.