Hedge Funds Had $9.8 Billion of Inflows in Comeback Year

(Bloomberg) -- Investors tiptoed back into hedge funds last year, committing $9.8 billion of new capital, as managers improved their performance over 2016.

Macro hedge funds led inflows with $10.8 billion in 2017, although the strategy’s performance lagged behind its peers, gaining only 3.9 percent, according to a report Friday by Hedge Fund Research. Equity funds, which gained the most of any strategy amid a stock market rally, saw outflows of $5.4 billion for the year as investors pared their exposure.

Clients came back to relative value in the fourth quarter after fleeing in the first. Assets allocated to the strategy rose $1.32 billion in the last three months of the year, but it wasn’t enough to overcome $5.6 billion in outflows for 2017.

The industry, which suffered $70.1 billion of outflows in 2016, finished last year with a record $3.21 trillion under management.

Here’s the full list of strategy flows for 2017:

StrategyFlows 2017Flows 4Q-2017
Macro$10.8 billion$660 million
Event-driven$10 billion$6.95 billion
Equity-$5.4 billion-$2 billion
Relative value-$5.6 billion$1.32 billion

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