Hedge Funds

Hedge Fund Assets Hit $4.32 Trillion

Summary of Preqin’s 2022 Global Hedge Fund Report:

• Returns across the asset class were up 11.43% (as of September 2021, +15.52% annualised).
• Event-driven funds topped the leader board, recording returns of +17.53%, ahead of equities at +14.85%
• Hedge funds’ assets under management (AUM) passed the USD4 trillion mark at the end of Q1 2021 and grew substantially to USD4.32 trillion as of September 2021.
• Strong inflows and a spirited performance drove an +8.1% increase in AUM in 2021 relative to the end of 2020 (USD3.99 trillion).
• Investors poured in $41 billion in 2021 (as of September 2021), with positive inflows recorded in every quarter.
• Additionally, $18.8 billion was committed to hedge funds in the second half of 2021.
• Every top-level strategy, except for credit ($6.7 billion) and multi-strategy ($0.6 billion), experienced positive inflows in 2021.
• Overall, investors are pleased with their hedge funds allocations, according to Preqin’s November 2021 survey: about half (48 %) believe that returns will be about the same in 2022 as in 2021, and almost a quarter (23 %) think the performance will be better.
• North America remained the most prominent investor base for hedge funds in 2021. Investors in the region accounted for 68% of the market and boasted the highest median allocation as a percentage of total AUM at 9.1%.
• North America (+13.67 % as of September, +18.62 % annualised) continued its positive momentum in 2021, outperforming Europe (+8.65 % as at September, +11.69 % annualised), and Asia-Pacific (+9.16 % as at September, +12.39 % annualised).
• North America’s strong performance resulted in positive cashflows of USD49 billion, while Europe’s lagging returns in 2020 and 2021 resulted in outflows of USD20 billion.
• Investors in Asia-Pacific ramped up their allocations last year by +USD13 billion, boosting AUM in the region by +11.9%.

Source: Preqin