Hedge fund assets reach record $5.64 trillion on $34.5 billion inflows

Global hedge fund assets reached a record $5.64 trillion in the third quarter as $34.5 billion of net inflows more than offset $27.4 billion of performance-based losses, according to HFR data reported by Hedgeweek.

The third quarter was the industry's 16th consecutive quarter of asset growth, according to HFR data reported by Hedgeweek. The quarter's net asset gain was about $7.1 billion, compared with a record $409.3 billion asset gain in the second quarter. Industry capital is up $480 billion so far this year, including $124.1 billion of net investor allocations.

Fee and capacity terms are easier to negotiate with the $1 billion to $5 billion tier, which posted $2.3 billion of net outflows. Firms above $5 billion took in $36.6 billion, more than the industry's $34.5 billion total, and firms below $1 billion gathered $190 million.

Multi-strategy funds added $19.8 billion to reach a record $900 billion, leading relative value assets up $19.2 billion to $1.45 trillion on $14.7 billion of net inflows. Macro assets rose $40 billion to $897.4 billion, including $8.8 billion of net inflows, with quantitative trend-following accounting for $23.5 billion of the increase.

Equity hedge and event-driven strategies shrank even with positive flows. Equity hedge assets fell $31.6 billion to $1.72 trillion despite $6 billion of inflows; after accounting for the flows, the decline was $37.6 billion. Event-driven assets dropped $20.5 billion to $1.57 trillion despite $4.9 billion of new capital; after accounting for flows, the decline was $25.4 billion.

Year to date, firms above $5 billion have taken $113.7 billion of the $124.1 billion in net allocations, about 92% of the total, Hedgeweek reported.