Hedge funds posted an estimated inflow of $13 billion, or 0.8% of industry assets, in November, according to a report from TrimTabs Investment Research and BarclayHedge. November marked the fifth consecutive month of inflow as well as the heaviest amount since February 2010, and Sol Waksman, president of BarclayHedge, said the numbers portend for a positive outlook for 2011. “Hedge funds returned 11.6% in 2010, and investors continue to pump money into the space,” Waksman said. “Additionally, we suspect pension managers will need to chase active returns because plans are underfunded and market yields are far too low to get the job done.” Equity long-short funds hauled the heaviest inflow compared to other hedge fund strategies. Equity long-shorts brought in $2.5 billion, or 1.3% worth of categorical assets, event driven funds took in $2.2 billion (1% of assets), and emerging markets funds received $1.8 billion (0.8% of assets). Fixed income funds recorded inflow for the seventh consecutive month at $1.9 billion, or 1.2% of assets. In November, commodity trading advisers posted an outflow for the first time in nine months — $3.9 billion or 1.4% of assets. Funds of hedge funds took in $473 million, or 0.1% of assets, for a fifth consecutive inflow posting. Vincent Deluard, executive vice president of research at TrimTabs, said his firm estimates 50% of hedge fund managers will collect fees for their performance in 2010, up from 32% in 2009 and 16% in 2008. The percentage of hedge fund managers that collected fees peaked in 2006 at 90%. Overall, Deluard said the two research organizations that complied the hedge fund report remain bearish on bonds. “Retail investors have been dumping muni, Treasury, and multisector bond mutual funds since prices started to tank, but seasoned market participants have yet to redeem fixed income assets,” Deluard said. “We are fundamentally bearish on bonds, but we expect to see bouts of bullishness when the economic outlook seems uncertain and crises in Europe bubble to the surface.” Write to Christine Ricciardi. Follow her on Twitter @HWnewbieCR.

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