Hedge funds delivered high single digit returns in 2012, but outflows offset the gains, leaving overall assets about flat for the year, says a new report from Credit Suisse AG.
The firm reports that hedge funds, as measured by the Dow Jones Credit Suisse Hedge Fund Index, finished December up 1.48%. And, it says that they generated an overall return of 7.67% for the year. Moreover, about 75% of managers posted positive returns, it says, up from 35% in 2011.
However, the industry saw estimated outflows of approximately $31 billion in 2012, it says, leaving overall assets relatively stable at $1.8 trillion, when factoring in the performance gains.
The fixed income arbitrage and global macro sectors experienced the largest asset inflows on a percentage basis in 2012, the report says, with inflows of 16.0% and 3.6%, respectively. It also notes that “a larger percentage of asset inflows went to funds with monthly or better liquidity, suggesting greater investor demand for more liquidity.”
As for outflows, dedicated short bias strategies and convertible arbitrage saw the most significant outflows in 2012, it says.
In terms of performance, multi-strategy and event driven strategies were the largest positive contributors to index performance in 2012, while managed futures and dedicated short bias were the only negative contributors, it says.