Tue, May 24, 2016
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. Other voices: What current trends tell us about the future of the hedge fund industry[more]

    By: Don Steinbrugge, Agecroft Partners The following comments are excerpted from Agecroft Partners’ Don Steinbrugge’s presentation delivered at the 69th CFA Institute Annual Conference held on May 9th, 2016 in Montreal. In Mr. Steinbrugge’s session titled "What Current Trends Tell Us about th

  2. Investing - Steve Cohen boosted Sotheby’s stake to $86 million last quarter, Larry Robbins' hedge fund sells off all CHS, UHS hospital stocks, Tiger Global cut stakes in Amazon, JD.com, Apple last quarter, Invest in real estate near biotech hubs, Prudential’s Hyat says, Valeant: A hedge fund hotel wrecking ball[more]

    Steve Cohen boosted Sotheby’s stake to $86 million last quarter Billionaire trader and art collector Steve Cohen is on a buying spree of Sotheby’s shares. Cohen’s Point72 Asset Management acquired 1.2 million Sotheby’s shares, bringing its total to 3.2 million valued at $86.1 million at

  3. Legal - Boaz Weinstein wins round in fight with Canada’s PSP[more]

    From FT.com: Boaz Weinstein, the hedge fund manager credited with spotting JPMorgan’s “London Whale” in 2012, has won a round in a legal battle with Canada’s Public Sector Pension Investment Board that had become a test case of responsibilities when clients withdraw money. PSP sued Mr Weinstein and

  4. Regulatory - The latest Fannie and Freddie reform bill offers a bonanza for hedge funds[more]

    From WSJ.com: The latest housing finance reform bill making the rounds on Capitol Hill offers a bonanza for hedge funds seeking to cash in on their investments in Fannie Mae Mae and Freddie Mac—but the cost to taxpayers would be steep. Congressman Mick Mulvaney, the South Carolina Republican, introd

  5. West Virginia objects to Alpha Natural sale to hedge fund[more]

    From AP/Heraldcourier.com: West Virginia's environmental authority has filed an objection to the proposed $500 million sale of Alpha Natural Resources' assets to a hedge fund, arguing that the deal could leave the state holding hundreds of millions in reclamation liabilities. The Register-Hera