A press release said the Hedge Fund Asset Flows & Performance Report was released concurrent with the HFN Q1 2008 Administrator Survey which shows total administered hedge fund assets were $2.759 trillion in Q108. New allocations to hedge funds were an estimated $53.02 billion during the quarter, while performance losses decreased assets by an estimated $93.18 billion resulting in the first on record quarterly loss to total hedge fund assets, according to the release.
Total assets in funds of funds increased 1.1% to an estimated $1.404 trillion. Performance losses of $57.19 billion were offset by new allocations of an estimated $71.85 billion.
Fixed income funds increased by 4.8% before performance losses, but the first quarter losses resulted in total estimated assets increasing only 3.6% to $554.79 billion. Equity focused fund assets fell 0.6% due to redemptions and with performance losses, total assets in equity focused funds fell 5.4% in the quarter to an estimated $1.038 trillion.
Emerging market hedge funds experienced their largest drop on record in Q108. Total asset levels fell 5.5% due entirely to performance losses estimated at $27.80 billion, HedgeFund.net said.
Despite equal-weighted average returns from distressed funds being negative in the first quarter, good performance from larger funds helped total asset levels in the strategy to rise. Performance gains along with new allocations of $6.04 billion resulted in total assets in distressed funds rising 3.3% to an estimated $252.32 billion.
Energy sector fund assets experienced their largest drop on record in Q108, falling 12.8% to an estimated $122.20 billion due mostly to performance losses of $12.91 billion. Net redemptions and liquidations resulted in an additional $5.05 billion exiting energy sector funds – likely the result of large monthly loses in the sector in November 2007 and January 2008, according to the release. The average energy sector fund was down 5.4% in the first quarter.
The full report provides asset flow and performance data for over 70 different regions, asset classes, sectors, and strategies in which hedge funds invest and can be ordered online at www.HedgeFund.net .