Mon, Jan 26, 2015
A A A
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Industry Updates

Hedge funds on pace to double 2010 investor inflows

Thursday, July 21, 2011

Laurence D. Fink
Opalesque Industry Update – According to research released by Dow Jones and Credit Suisse, hedge funds are on pace to double the inflows seen by the industry last year. With an estimated $34bn entering hedge fund coffers in the first half of 2011, Credit Suisse estimates that industry assets are currently only $300bn shy of the peak asset level of 2007 (which the firm pegs at $2.1tln – and historically, Credit Suisse has always carried much more conservative estimates of hedge fund industry assets than other firms).

From the $34bn that entered the industry in the first half of the year, fixed income arb, global macro and long/short equity were the biggest benefactors of investor interest. The authors of the Credit Suisse report indicate that one likely factor for the preference to these strategies is likely “investor concerns over macroeconomic and geopolitical themes that have emerged in the second quarter of 2011, including the European debt crisis and the “Arab Spring”. With investors discounting an increased probability of a ‘tail event’ flows have gravitated toward strategies that may profit from a significant shock or a substantial change in government policy.”

Investor wariness of markets due to geopolitical events and specifically political instability in developed nations (specifically concerns over how politicians will act regarding European sovereign debt and the US debt ceiling) are causing investors to position themselves for potential economic disaster. At Wednesday’s BlackRock quarterly call, Chairman and CEO Larry Fink commented that politicians around the globe had investors de-risking out of concerns for the future, and Fink uncharacteristically spoke about his concerns for mass civil unrest should politicians continue to react to debt problems by leaning on the larger population rather than making bond holders share in the losses.

Along with specific strategies, investors are also continuing to show a strong preference for the largest funds. Credit Suisse reports that the largest one-third of funds (those with over $500m in assets), outpaced fund raising assets by taking $12.1 billion of the flows. In fact, middle tier funds and small funds both experienced net outflows. “This trend continues to demonstrate investor demand for larger-scale hedge fund managers who possess established infrastructures.”

Kirsten Bischoff

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 - U.S. investors favor currency hedged Europe ETFs as euro tumbles, Quants win back investors as Swiss franc fuels volatility gains, David Einhorn's $7bn hedge fund is loading up on this stock, Hedge fund BlueMountain Capital unveils Ocwen Financial short, claims default on notes[more]

    U.S. investors favor currency hedged Europe ETFs as euro tumbles From Reuters.com: U.S. investors stung by the falling euro who want to stay invested in Europe are turning to exchange-traded funds designed to strip out the impact of the region's currency. The biggest among so-called "cur

  2. News Briefs - Millennials use tech tools to jump into investing, Winklevoss twins to launch bitcoin exchange with FDIC insured deposits, Robertson’s legacy from hedge funds to New Zealand, Real estate managers exploring smaller open-end funds[more]

    Millennials use tech tools to jump into investing It is the Facebookification of monetary investing. From social networking platforms that enable young investors to stick to every other's stock-picking mojo, to internet sites for initially-timers hungry for a piece of the Silicon Valley

  3. Top performing private equity firms you should invest in[more]

    Komfie Manalo, Opalesque Asia: Professor Oliver Gottschalg of Paris-based HEC Business School, also known as Ecole des Hautes Etudes Commerciales de Paris has released his annual ranking of the top performing private equity firms. The 2014 HEC-DowJones Private Equity Performance Ranking

  4. Comment - Why invest in hedge funds if they don't outperform the market?[more]

    From Forbes.com: Hedge funds have always been a bit exotic and an enigma to some, but bottom line they are supposed to produce good returns using a range of strategies including global macro, event driven and relative value (arbitrage). And, sophisticated or high-net-worth individuals (HNWIs) could

  5. Owen Li 'truly sorry' for blowing up $100m of hedge fund’s assets[more]

    From CNBC.com: A hedge fund manager told clients he is "truly sorry" for losing virtually all their money. Owen Li, the founder of Canarsie Capital in New York, said Tuesday he had lost all but $200,000 of the firm's capital—down from the roughly $100 million it ran as of late March. "I take r