Mon, Oct 5, 2015
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Industry Updates

Emerging Markets the darling of hedge fund industry as managers send them record $121bn

Friday, June 03, 2011
Opalesque Industry Update - Hedge funds have reached a new record in assets allocated to the new darling markets of the financial world: emerging markets. With over $121bn surging into these financial markets from hedge funds alone, managers have surpassed the previous $117bn record that was set in 2007 as the financial crisis hit the developed world.

With returns that have managed to navigate hiccups through certain emerging markets (the political unrest in the Middle East and inflation-sensitive declines in emerging Asia), HFRI has reported that its Emerging Markets Index stands at +2.80% YTD (through April) with Russia/Eastern Europe funds returning an impressive +8.22% YTD (through April). Middle East specific funds have struggled with the HFRX MENA Index falling for most of the year before an April rebound curbed those losses to approximately 3%.

“The record level of assets invested in Emerging Market hedge funds represents the latest evidence that global investors continue to exhibit a preference for accessing specialized Emerging Markets exposure via hedge funds,” commented Kenneth J Heinz, President of Hedge Fund Research, in a statement released by the firm. Heinz said that the number of funds in Brazil, China, Russia, Singapore and the UAE continue to grow at a strong pace, which is a trend the research firm expects to continue for the foreseeable future.

While emerging markets are seeing a flood of dollars, as investors for the first time look to diversify out of developed markets in a reverse “flight to safety” as those countries stumble in their financial recovery, the real threat for emerging markets is quickly becoming inflation. “If left unchecked, high and accelerating inflation will have growing adverse economic, social and political effects. In addition to undermining overall growth and resource allocation, it imposes a very heavy burden on the poor and erodes political unity,” wrote PIMCO’s Mohamed A. El-Erian in a commentary published this week. (Source)


What do you think?

   Use "anonymous" as my name    |   Alert me via email on new comments   |   
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. Performance - Hedge fund moguls Einhorn, Loeb, Rosenstein lose money in September, Risky strategy sinks small hedge fund[more]

    Hedge fund moguls Einhorn, Loeb, Rosenstein lose money in September From Billionaire stock pickers David Einhorn, Daniel Loeb and Barry Rosenstein on Wednesday told their wealthy investors they lost money in September as market turmoil inflicted more pain on some of America'

  2. Opalesque Exclusive: IRAs represent billions of untapped capital for hedge funds[more]

    Benedicte Gravrand, Opalesque Geneva: Retirement accounts might not be the first source that comes to mind for those looking to raise funds, but they may represent billions of untapped capital. Unlike traditional retirement accounts,

  3. Opalesque TV: One way to access market hedge funds in the EU under the AIFMD radar[more]

    Benedicte Gravrand, Opalesque Geneva: While the Cayman Islands, the US and Hong Kong await the pan-European marketing passport to be extended to alternative investment fund

  4. Vilas’ equity long bias hedge fund generates market-beating results[more]

    Komfie Manalo, Opalesque Asia: The Vilas Fund, an equity long bias fund managed by Chicago, Illinois-based Vilas Capital Management, posted five-year annualized returns, net of fees, of 23.47% vs. 15.87% for the S&P 500 Index, including divid

  5. Performance - Manager admits spin used to hide poor performance, Fortress macro hedge fund slumps 17.2% amid manager shakeup, In the hedge fund world, bigger is still better[more]

    Manager admits spin used to hide poor performance From … Colin McLean, managing director of SVM Asset Management, told FTAdviser that fund managers underperform all the time, so stories are often needed to mask or explain this. “People need to build a good framework