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March 2023 | With Intelligence
February saw a reversal of January’s positive start to 2023 with hedge fund industry AuM down $10bn. The downturn was wholly driven by outflows as performance had a slight uptick of $0.6bn during the month and compares favorably with the S&P 500 (-2.6%) and the Dow Jones (-4.2%) as the likelihood of a global recession during 2023 increased. No strategy attracted inflows during February with long/short equity (-$6.6bn) reversing January’s impressive performance gains ($13.3bn) after the end of the US equity rally and continued Fed fiscal tightening.
Following an outstanding January (2.8%), which was the best opening to a year since 2006 according to the Eurekahedge Hedge Fund Index, global hedge funds struggled in February, ending down 0.5%. However, the S&P 500 was down 2.6% and the Dow Jones was down 4.2% in February, illustrating that hedge funds were still successful in navigating the ongoing global economic turmoil. Returns were subdued across strategies in February with distressed debt (0.8%) leading the field.
