Sat, May 27, 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. Investing - Tudor Jones backs AI hedge funds, Massive hedge fund trades highlight insider buying: GE, Pentair, Tempur Sealy, Apollo Global and more, Hedge funds big wigs are buying consumer and selling tech, here's the stocks[more]

    Tudor Jones backs AI hedge funds From FT.com: Hedge fund magnate Paul Tudor Jones has invested in a brace of artificial-intelligence powered "quantitative" hedge funds, underscoring the increasing acceptance that the industry will need to turn more to technology and away from traditional

  2. Soon hedge fund investors won't bet on a man, they will bet on a machine[more]

    From Forexlive.com: The Wall Street Journal is in the midst of a 17-part series that looks at the rise of quant funds. The AUM and money invested in quant funds still trails traditional asset managers but the gap is closing. What's truly amazing is volume. Quant funds make up 27% of trading vo

  3. Investing - China's HNA wants to invest in Value Partners, Risk parity investors reap rewards from rebalancing act, SoftBank's $100 billion tech fund rankles VCs as valuations soar[more]

    China's HNA wants to invest in Value Partners From Reuters.com: HNA Group has alighted on a logical, if pricey, target in Hong Kong. The deal-hungry Chinese travel conglomerate known for overpaying wants to invest in Value Partners, one of Asia's few sizeable independent asset managers,

  4. Opalesque Exclusive: Investors warm to ESG, but seek standardization[more]

    Bailey McCann, Opalesque New York: Asset managers and asset owners plan to double their investment in Environmental, Social and Governance (ESG) driven strategies over the next two years, according to a survey from BNP Paribas Securities Services. The report, "Great Expectations: ESG - what's nex

  5. Opalesque Roundtable: France's hidden strengths in AI and machine learning[more]

    Komfie Manalo, Opalesque Asia: All nations offer their strengths and weaknesses, but one that is undisputed is the quality of the French scientists, claimed Guillaume Vidal, co-founder of French technology startup Walnut Algorithms at the