In summary...
A combination of positive performance and marginal net inflows saw industry assets grow over the year by just over $243bn. From a growth perspective, multi-strategy funds were the big winners, benefitting from a combination of significant net inflows as well as strong performance.
The hedge fund industry continued its positive run of performance through 2021, finishing up 7.6%, having returned over 9% the previous year.
Performance dispersion between the top and bottom decile performing segments of the hedge fund universe fell sharply in 2021, however, current dispersion remains elevated relative to the 2012-2020 period.
The best performing strategies were event (+12.1%), multi-strategy (+11.4%), long biased (+10.8%), and credit (+9%).
Coordinated activity by retail investors in January led to extreme levels of volatility in the equity long/short space. However, diversification contained the damage, ensuring that contagion from elevated equity long/short volatility did not spread across the whole hedge fund space, with strategies such as event, long biased, credit, arbitrage and macro sailing through January relatively unscathed.
Overall hedge funds performed well in 2021 with the HF composite return comfortably above its 5yr CAR (6.59%)
