Only three strategies avoided net outflows in February as investor redemptions, largely dating from the industry’s poor final quarter, took effect.
Investors pulled cash amounting to 1% of the European industry in February, adding to withdrawals in January. But better performance provided some succour, with most strategies gaining in February. Europe’s sector grew 0.7% on the basis of performance gains, meaning an overall -0.3% net movement in assets.
- Commodities funds were worst hit by redemptions in February, as net outflows dented the strategy by over 5%. Pierre Andurand’s volatile performance in 2018 and first annual loss typified the struggles faced by commodities during a turbulent year. Investors reacted by pulling cash from the strategy.
This year has been better for the strategy, not least for Andurand, whose flagship rose 3.2% in the first two months. Managed futures and equity market neutral and quant strategies were also dented by net outflows in February despite performance gains.
EM debt and equity funds, along with global macro, were the three strategies to avoid net outflows in February. The interest in the latter comes as the longest running macro fund in London, Paul Brewer’s Rubicon flagship, prepares to close after 20 years. A record loss in 2017 and only minor recovery last year was behind the decision, which will leave some investors looking for a new macro fund to back.
On the EM front, investors have been cheered by the impending return of sector specialist Martin Taylor, who closed his successful fund Nevsky in 2015. Crake Asset Management is due to start later this year and expected to raise $1.5bn or more.
Flows YTD
Year to date for the first two months, commodities funds have seen the most outflows, while credit has seen the least, but a net outflow nonetheless, of 0.6%. Equity market neutral and quant strategies, volatility trading and event-driven strategies have also seen heavy outflows over the first two months.
In terms of performance, emerging market equity and debt funds have been most boosted by gains. Global and European equity funds have also fared well.
Flows watch: Commodities hit by redemptions despite Feb gains on EuroHedge.