Fri, Dec 19, 2014
A A A
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)

kb

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. Investing - Big hedge funds win again on PetSmart, Riverbed, RBS sells real estate loans to hedge fund Cerberus, Talisman energy speculation: Which hedge funds could benefit?[more]

    Big hedge funds win again on PetSmart, Riverbed From CNBC.com: Another week, another set of wins for activist investors. On Sunday, pet supply retailer PetSmart agreed to the largest leveraged buyout of the year at $8.7 billion. Hedge fund firm JANA Partners had been pushing for a sale a

  2. Outlook - Hedge fund manager who remembers 1998 rout says prepare for pain, Bond guru Bill Gross predicts U.S. economic growth to dip to 2%[more]

    Hedge fund manager who remembers 1998 rout says prepare for pain From Bloomberg.com: Stephen Jen landed in Hong Kong in early January 1997 as Morgan Stanley’s newly minted exchange-rate strategist for Asia. He was soon working around the clock when investors began targeting the region’s

  3. Opalesque Exclusive: U.S. legal receivables fund launched in August[more]

    Benedicte Gravrand, Opalesque Geneva for New Managers: Investing in asset-backed receivables is a strategy that has been an integral part of the alternative investment space within the overall fixed income asset c

  4. Comment - High fees and low performance hit hedge funds[more]

    From FT.com: Disenchantment over high fees and lackluster performance may finally be turning the tide against hedge funds, fresh data suggest. Despite generally weak returns since the global financial crisis, hedge funds have enjoyed positive net inflows every year since 2010. This helped assets und

  5. Performance - Lansdowne, Man Group, other hedge funds profit from shorts in oil, Turmoil boosts hedge funds that bet against Russia, oil, CTAs post strongest returns since December 2010[more]

    Lansdowne, Man Group, other hedge funds profit from shorts in oil From Valuewalk.com: The rising short interest in oil companies implies that the worst for oil is yet to come. Data from Markit shows that short exposure in energy sector of S&P 500 is still looming close to the highest mar