After November’s promising uptick ($3.8bn), hedge fund industry AuM returned to the previous seven months’ record and was down $5.6bn in December, which took the YTD decline to $198bn. However, overall performance in December was impressive, up $8.5bn, with the net reduction driven by outflows of $14.1bn. Similarly, December also saw a flat hedge fund performance, dipping 0.3% thereby holding their 2022 losses to 3.8%. By comparison, the S&P 500 lost 19.4%, exemplifying the relative resilience that hedge funds displayed in navigating the market turmoil in 2022. North America ($7.6bn) accounted for most of the AuM decrease, driven by outflows rather than performance as wider economic prospects remained uncertain after inflation steadily decreased to 6.5% after the record highs of June and the Fed’s tighter monetary policy weighed on global growth. North America’s AuM decline ($67bn) was overshadowed by Europe’s AuM decrease of $112bn with the entrenched Ukraine conflict, commodities price surge and underwhelming German economic performance all impacting investor confidence.
Asset flows data since January 2021
Key highlights for December 2022:
- Hedge fund industry AuM was down $5.6bn in December, taking YTD decline to $198bn.
- However, overall performance in December was impressive, up $8.5bn, with the net
reduction driven by outflows of $14.1bn.
- North America ($7.6bn) accounted for most of the AuM decrease, driven by outflows rather
than performance.
-
In contrast to November, long/short equity recorded the largest outflows ($11.7bn) in
December.
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