Multi-Strategy Dominated HF Performance in July
Hedge funds received the second highest level of investor inflows this year in July, with managers collecting around $3.3 billion in net new investments as more than two-thirds of strategies gained, according to Citco.
New investor subscriptions of $10 billion exceeded the $6.7 billion redemptions last month. Managers produced an average performance return of 0.6%, up from 0.4% in June, the alternative investment asset servicer revealed.
“Multi-strategy funds were the focal point of activity in July,” Citco noted in its latest Monthly Hedge Fund Update. Allocators invested $4.5 billion of capital while redeeming $2.2 billion, resulting in a net inflow of $2.3 billion for multi-strategy. In terms of performance, the approach advanced by around 1% in July.
Long/short equity managers remained prevalent with investors adding approximately $800 million in net new capital in July. After generating 1.5% in June, stock-picking tactics saw their performance drop, but they remained positive, completing the month up 0.1%.
In July, fixed income arbitrage was the most successful overall performer, generating a 1.4% return, attracting approximately $100 million in net new inflows. Global macro managers and event-driven strategies each received approximately $100 million in net inflows from investors, resulting in $200 million in inflows for funds of funds.
Although funds of all sizes experienced positive net inflows, the largest funds, which had over $10 billion of assets under administration (AUA), dominated the market with $1.8 billion of net inflows for the month. They were succeeded by the smallest funds, which added $700 million on a net basis and had an AUA of less than $1 billion.
Meanwhile, data revealed that treasury payment volumes established a new record in July with 52,650 transactions, exceeding the previous peak set in December 2023, indicating that market activity remains strong. More broadly, 64.1% of all hedge funds posted positive returns to investors in July, a significant increase from 55% the previous month.