With global equity markets facing turmoil and fixed income yields trading at 60-year lows, investors continue to pour capital into hedge funds, according to new data.
Hedge fundflows advanced roughly 2.3 percent in September, the second highest month of the year, according to GlobeOp’s Capital Movement Index—which tracks investor capital movements for roughly $170 billion in hedge fund assets (approx. 8-10 percent of the industry’s total assets).
GlobeOp tabulates hedge fund flows on a one-month forward basis—investors typically must give advance notice for both hedge fund subscriptions and redemption's, which usually take effect on the first of the month.
“We were quite positively surprised by the strength of the new subscriptions,” Vernon Barback, GlobeOp’s President told CNBC in a phone interview.
Headquartered in New York and London, GlobeOp Financial Services is a financial administrator for hedge funds and asset management firms.
“One theory is that in these times of great uncertainty in the equity markets and record low yields in fixed income, that perhaps investors are looking at a diversified pool of hedge funds and saying it’s a good place to park [money] in a difficult time,” said Barback.
He noted 17 of his clients saw net subscriptions of at least $50 million, and included both large and small funds.
Hedge funds surpassed $2 trillion in assets under management for the first time in history in the first quarter of this year, according to data from Hedge Fund Research, and inflows continued through the second quarter.
Hedge funds have outperformed broader markets during a tumultuous year, suffering losses of just -1 percent through August compared to -4.2 percent for the S&P and –6.7 percent for the Dow Jones Global Index.
CNBC Data Pages:
- Dow 30 Stocks—In Real Time
- Oil, Gold, Natural Gas Prices Now
- Where's the US Dollar Today?
- Track Treasury Prices Here