Key Takeaways
- • Equity long/short hedge funds achieved positive inflows in 2015, marking a second consecutive year of investor net inflows to the strategy despite industry-wide headwinds and declining overall asset growth across the hedge fund universe.
- • Inflows to equity long/short strategies declined compared to 2014 levels, consistent with a broader slowdown in hedge fund capital deployment as overall industry asset growth fell to nearly 50% below 2015 levels.
- • Geographic diversification drove returns in 2015, with Europe, Australasia, and Far East equity long/short exposures outperforming during a challenging year for the broader hedge fund industry.
- • Sustained positive investor sentiment toward equity long/short strategies represents a notable achievement for the strategy class, as consistent positive inflows have been rare across the hedge fund industry since the 2008 financial crisis.
Summary
Equity long/short hedge funds attracted positive inflows during 2015, continuing a trend of investor confidence in the strategy that extends into a second consecutive year. This development is noteworthy given the challenging environment faced by the broader hedge fund industry, which experienced significant headwinds throughout the year and saw overall asset growth contract to levels approximately 50% below 2015 figures.
While 2015 inflows to equity long/short strategies declined from the prior year's 2014 levels, the maintenance of positive net capital flows represents a meaningful achievement within the hedge fund landscape. Since the financial crisis, consistent positive inflows have been difficult for hedge fund strategies to achieve, making two successive years of positive investor sentiment a noteworthy reversal of longer-term patterns.
Performance was supported by geographic diversification, with Europe, Australasia, and Far East-focused equity long/short funds delivering positive returns during 2015. This regional strength helped the strategy class maintain investor appeal despite the challenging macroeconomic backdrop and broader industry headwinds affecting capital flows and hedge fund performance.
While 2015 inflows to equity long/short strategies declined from the prior year's 2014 levels, the maintenance of positive net capital flows represents a meaningful achievement within the hedge fund landscape. Since the financial crisis, consistent positive inflows have been difficult for hedge fund strategies to achieve, making two successive years of positive investor sentiment a noteworthy reversal of longer-term patterns.
Performance was supported by geographic diversification, with Europe, Australasia, and Far East-focused equity long/short funds delivering positive returns during 2015. This regional strength helped the strategy class maintain investor appeal despite the challenging macroeconomic backdrop and broader industry headwinds affecting capital flows and hedge fund performance.
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