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Industry Updates

Global hedge funds reach $1.81tln in April as assets grow by $52bn

Thursday, May 26, 2011
Opalesque Industry Update – Global hedge funds assets reached $1.81tln as at end April 2011, reaching its highest level since the financial crisis in 2007.

According to the latest report of hedge fund data provider Eurekahedge, hedge funds assets gained an additional $52.3bn in April, the tenth consecutive month of positive returns for the industry.

The Eurekahedge Hedge Fund Index posted a positive +1.58% gain in April, the report added. During the 10-month period, hedge funds returned 13.48%.

“Most regional hedge funds ended the month with positive returns while Japanese managers delivered downside protection and outperformed their underlying market indices. The industry attracted $28.33bn in net asset flows while performance based growth was $23.97bn,” Eurekahedge said.

Major findings of the report, includes data on net inflows during the first four months of the year which exceeded the total net flows for the whole of 2010 which amounted to $93.9bn compared to $66bn from April last year.

Other key highlights of the report are:

  • CTA/managed futures funds up 3.12% in April.
  • Funds of hedge funds see first quarter of net positive asset flows since 1Q 2008.
  • Asian hedge funds witness 12 consecutive months of net positive asset flows.
  • Long/short equity funds have attracted US$30.7 billion April YTD.
  • Launch activity remains strong with more than 200 funds launched so far in the year.
  • Assets in event driven hedge funds crossed US$200 billion mark (for the first time or to reach historical highs).
  • 43% of FoHFs investors are planning to increase allocations to event driven strategies over the next three months...
  • ...while 34% are planning to increase their exposure to Asia ex-Japan strategies.

Eurekahedge’s figures differ from the estimates given by independent hedge fund data tracker Hedge Fund Research, Inc., which showed that the hedge fund industry expanded to $20.2tln.

In its own estimate HFR added that while hedge funds assets reached a new high, the industry leveraged declined in the past months across all hedge fund strategies from 1.27 to 1.10 times investment capital, while average margin to equity also declined, falling from 17.13 to 16.98%, year over year.

HFR President Kenneth Heinz commented, “The hedge fund industry reached a new record level of capital in 1Q11 by offering investors performance driven by prudent use of leverage, transparency and inflation protection over the long term. The industry has evolved to suit the requirements of sophisticated investors as an integral component of their portfolio allocations as they position for growth and global inflation in 2011 and years to come.”
-Komfie Manalo

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