This roller coaster seems to be heading in only one direction, and that is up. Hedge Fund Research reported in April that global hedge fund assets rose to a record high of $3.8 trillion in March 2021. Investors showed their confidence in hedge funds by adding about $201 billion to that pool of money during the first quarter, gaining on average about 6%.
Cryptocurrency hedge funds were the best performers, rocketing to new heights with a 120% increase in value. Even the more usual vehicles, such as event-driven hedge funds, grew by about 8.2%. Equity-focused funds scored wins of about 7.1%.
During the first quarter, the Preqin All-Strategies Hedge Fund Benchmark was up 7.81%. Compare that to the S&P’s gain of 5.77% during the same time frame. This is the best first quarter in 15 years. Barclays is expecting hedge funds to attract new money to the tune of about $30 billion, the sector’s first increase in money in since 2017.