Sun, Mar 29, 2015
A A A
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Alternative Market Briefing

Other Voices: Global central banks have become the largest hedge funds in the world - Eagle’s View Capital

Monday, October 08, 2012

amb
Neal Berger
This article was authored by Neal Berger, of Eagle’s View Capital Management, a fund of hedge funds house located in New York.

Within this commentary, we’d like to broadly address an issue that few within the hedge fund industry want to tackle head-on, or, even acknowledge for that matter. Simply put, the equity market in the US as measured by the S&P or NASDAQ is up more than +15% YTD while the average hedge fund languishes at or near +3% for 2012. In addition, hedge funds underperformed last year as well, with the average hedge fund down more than -5% while the equity markets rose modestly.

What is causing this recent massive underperformance by hedge funds versus equities? We have always believed that the majority of the mainstream strategies within the hedge fund industry are largely correlated to the overall direction of equities. As such, we have been pondering an answer to this unusual disconnect of recent times. Are hedge funds 'finding religion’ and consciously attempting to become less correlated, at least in magnitude, to equity market moves? We think not. Rather, we put forward our hypothesis of this unusual phenomena.

In effect, global central banks have become the largest hedge funds in the world. Their activity in the market dwarfs the activity of the largest privately held hedge funds by a substantial magnitude. One differentiating and crucial factor is that these large "publ......................

To view our full article Click here

Today's Exclusives Today's Other Voices More Exclusives
Previous Opalesque Exclusives                                  
More Other Voices
Previous Other Voices                                               
Access Alternative Market Briefing


  • Top Forwarded
  • Top Tracked
  • Top Searched
  1. Other Voices: Does the hedge fund industry benefit society?[more]

    This article was authored by Don Steinbrugge, Chairman of Agecroft Partners, a US-based global consulting and third party marketing firm for hedge funds. It is no secret that the hedge fund industry is viewed negatively by a la

  2. Private credit comes into focus for investors[more]

    Bailey McCann, Opalesque New York: As investors look for a way out of the low yield/no yield environment, private credit is becoming an increasingly attractive asset class, according to a white paper from Bayshore Capital Advisors. Private credit has grown steadily since the financial crisis as

  3. M&A - Hedge funds no longer attractive targets for banks, reinsurers, Blackstone buys stake in Christopher Pucillo’s Solus event-driven hedge fund[more]

    Hedge funds no longer attractive targets for banks, reinsurers From Institutionalinvestor.com: Swiss RE, the world’s second-largest reinsurer, is looking to sell its 15 percent stake in Jersey, Channel Islands–based hedge fund firm Brevan Howard Asset Management. Morgan Stanley reported

  4. Opalesque Radio: Threadneedle expects continuing equity volatility this year[more]

    Benedicte Gravrand, Opalesque Geneva: Investors should expect more volatility, which is signaling a "slow moving" top to the market, KKM Financial’s founder and CEO Jeff Kilburg told CNBC on Monday. And this volatility is going

  5. Hedge funds show strong performance of 2.52% so far in 2015[more]

    Komfie Manalo, Opalesque Asia: The hedge fund industry got off to a strong start in 2015 "completely unmindful" of the poor performance last year, according to data provider Preqin. According to Preqin, following a year which saw the average he

 

banner