Mon, May 2, 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. Hedge funds see $14.3bn outflows in Q1, CTAs and multi-strategy lead net inflows[more]

    Komfie Manalo, Opalesque Asia: The hedge fund industry saw net outflows of investor capital in the first quarter of the year, totaling $14.3bn, data from Preqin showed. This continues from the $8.9bn overall net outflows that funds recorded in Q4

  2. Third Point calls Q1 "catastrophic" for hedge funds[more]

    Bailey McCann, Opalesque New York: The first quarter of this year was rocky for hedge funds based on aggregate performance from the industry, but now we are beginning to hear what the managers thought of it as quarterly letters make their way to investors. Dan Loeb, CEO of New York-based $17 bill

  3. Asia - Stabilization of China's capital outflows may hinge on Janet Yellen, Fink says China to do well this year as bubble threat postponed, Chinese hedge fund to invest in India’s infrastructure[more]

    Stabilization of China's capital outflows may hinge on Janet Yellen From Bloomberg.com: Whether China’s recent stabilization of its currency and capital outflows continues -- or downside pressure reignites -- may hinge in large part on Janet Yellen. If the Federal Reserve chair sticks to

  4. …And Finally - After all, judges are human too[more]

    From Newsoftheweird.com: In March, one District of Columbia government administrative law judge was charged with misdemeanor assault on another. Judge Sharon Goodie said she wanted to give Judge Joan Davenport some files, but Davenport, in her office, would not answer the door. Goodie said once the

  5. Comment - Unmasking the men behind Zero Hedge, Wall Street's renegade blog[more]

    From Bloomberg.com: Colin Lokey, also known as "Tyler Durden," is breaking the first rule of Fight Club: You do not talk about Fight Club. He’s also breaking the second rule of Fight Club. (See the first rule.) After more than a year writing for the financial website Zero Hedge under the n