Asset flows: Distressed funds flourish

By Amal Robleh

Fri Jan 10, 2014

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Investors redeem from MBS.


Significant assets flowed into distressed hedge funds in November following strong performance. The strategy, which was up 12.95% through November, took in net assets of 2.99%. Performance gains of 1.86% resulted in total assets for the strategy increasing 4.84%.

Investors took note of mixed arbitrage funds, as five straight months of performance gains led the strategy toward its best performing year since 2010. The strategy had net inflows of 2.27% in November, with a performance gain of 0.75% contributing to an overall asset increase of 3.03%.

Commodities funds continue to bleed money this year. Following three consecutive losing months, investors pulled 4.90% of their capital in November. Asset-weighted performance losses of 1.35% led to total assets falling by 6.25%

A full chart of fund flows is provided below. This new monthly feature is based on self-reported monthly asset and performance figures from Americas-based hedge funds listing in the  HedgeFund Intelligence database.  Funds reporting their monthly assets in both the current (November) and previous (October) month managed a total of $421 billion.

Change in assets (November 2013)

Strategy

Fund Flows

Performance

Total

Commodities

-4.90%

-1.35%

-6.25%

Convertible & Equity Arbitrage

2.13%

-0.11%

2.02%

Credit

1.55%

1.03%

2.59%

Distressed

2.99%

1.86%

4.84%

Event Driven

1.79%

2.24%

4.03%

Fixed Income

1.42%

 -0.09%

1.33%

Global Equity

0.55%

1.89%

2.45%

Latin American Equity

-4.37%

-2.75%

-7.13%

Macro

-0.05%

-0.39%

-0.44%

Managed Futures

-1.57%

2.33%

0.76%

Mixed Arbitrage

2.27%

0.75%

3.03%

Mortgage Backed Securities

-0.21%

1.02%

0.81%
MultiStrategy 1.56% 1.02%

2.58%

U.S. Equity

1.96%

1.61%

3.57%

Other*

-0.42%

-0.30%

-0.72%

Total

0.69%

0.63%

1.32%

*The category 'Other" refers to those funds whose strategies are not well represented enough in the database i.e. Emerging Market Debt, Emerging Market Equity and Volatility.