HFR: Hedge Fund capital surpasses $4T Milestone driven by Inflation, Geopolitical Volatility

November 1, 2023

HFRI Institutional Equity Hedge Index leads YTD strategy gains through 3Q;

Investors allocate over $2 billion in new capital across all strategies;

Inflows again concentrated in the industry’s largest firms 


(HFR, October, 23rd 2023), Hedge fund assets exceeded $4 trillion at the start of the fourth quarter of 2023. This growth was influenced by economic uncertainty, geopolitical instability, and changing investor preferences.

During the third quarter, total hedge fund assets increased for the fourth consecutive quarter, with investors directing new capital toward Event-Driven and Relative Value Arbitrage strategies while reducing allocations to Equity Hedge strategies.

The hedge fund industry extended its year-to-date gains through a volatile third quarter, with total global hedge fund capital estimated at $4 trillion. This data comes from HFR, a leading authority in hedge fund industry analysis.

Investors allocated approximately $2.3 billion in new capital to the hedge fund industry in the third quarter, driven by Event Driven strategies.

Radient has partnered with HFR to provide its users with complete access to hedge fund data. Radient with HFR data shows a list of 823 Event Driven hedge funds.

The HFRI Institutional Fund Weighted Composite Index gained +4.0 percent year-to-date through the third quarter, led by Equity Hedge and Event Driven strategies.

Event-Driven (ED) strategies, which focus on out-of-favor assets, experienced substantial growth in the third quarter, with higher beta Special Situations and Distressed strategies leading the way.

Radient HFR data shows a list of 550 Event-driven hedge funds with special situations and distressed sub-strategies. Users can analyse each fund individually or compare multiple funds together. Radient also provides users with the ability to access all the cross-referenced and integrated SEC filings by the firms managing these hedge funds.

Relative Value Arbitrage (RVA) strategies also saw an increase in capital due to rising interest rates, particularly Multi-Strategy funds.

The HFRI Macro (Total) Index recovered from earlier declines, with Systematic Diversified CTA strategies leading the asset increases.

Equity Hedge (EH) strategies faced a decline in the third quarter due to increased equity market volatility, particularly affecting Fundamental Value and Growth strategies.

Inflows in the third quarter were mainly concentrated in mid-sized and the largest firms in the industry, with smaller firms experiencing outflows.

HFR President Kenneth J. Heinz noted that hedge funds have demonstrated their ability to navigate shifting market conditions and attract capital from global financial institutions. These trends are expected to drive industry growth into 2024.

Read the full report, here.

Radient has data partnership with HFR that revolutionizes hedge fund manager research and due diligence and radically improves performance measurement, peer group analysis, and portfolio construction.


About HFR
HFR is the established global leader in the alternative investment industry. Established in 1992, Hedge Fund Research® specializes in the areas of indexation and analysis of hedge funds. HFR has developed the industry's most detailed fund classification system, enabling granular and specific queries for relative performance measurement, peer group analysis, and benchmarking.



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