Mon, Sep 25, 2017
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. iCapital Network enters deal to acquire innovative U.S. private equity access fund platform from Deutsche Bank[more]

    Komfie Manalo, Opalesque Asia: Financial technology platform iCapital Network has entered into a definitive purchase agreement to acquire the US Private Equi

  2. Asia - Hedge funds used to love shorting China. Now, not so much, Fledgling China FoFs require careful use: NCSSF, Amac, Japanese banks turn to PE, hedge funds for returns[more]

    Hedge funds used to love shorting China. Now, not so much From Bloomberg.com: A sharp devaluation. A credit crisis. And an economic hard landing. That's what some of the biggest names in the hedge fund industry were predicting for China after the nation's stocks and currency tumbled in 2

  3. Launches - Orchard launches new credit platform, ETN based on hedge fund to launch on the LSE[more]

    Orchard launches new credit platform Orchard Platform has rolled out Deals as a part of its new platform launch. With the addition of Deals to their suite of technology solutions for loan originators and institutional investors, Orchard Platform takes the next step in their evolution. De

  4. Neuberger Berman closes $1.1bn Credit Opportunities Fund[more]

    Neuberger Berman, a private, independent, employee-owned investment manager, announced that NB Private Equity Credit Opportunities Fund LP closed on $1.1 billion of limited partner commitments. The Fund seeks to invest in the secured and unsecured debt of private equity-backed companies, primarily i

  5. Capital Dynamics launches mid-market private credit business[more]

    Capital Dynamics, a global private asset manager, has launched a dedicated Private Credit Asset Management business. Experienced industry executives Jens Ernberg and Thomas Hall have joined Capital Dynamics to co-lead the company's new private credit initiative. They are based in Capital Dynamics' N