Thu, Oct 2, 2014
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   |   

Banner

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. Legal - Court throws out lawsuits related to Fannie Mae, Freddie Mac profits, Insider case by SEC is a step removed from Herbalife itself, SEC grants Citigroup waivers, easing hedge-fund curbs[more]

    Court throws out lawsuits related to Fannie Mae, Freddie Mac profits From WSJ.com: A group of Wall Street investors on Tuesday suffered a blow in their attempts to sue the federal government over their treatment of the shareholders of mortgage finance giants Fannie Mae and Freddie Mac af

  2. Launches - Goldman Sachs Asset Management launches GS Long Short Fund, Western & Southern launching international hedge fund, Lansdowne Partners plans energy hedge fund, RBC Global Asset Management launches new RBC Funds (Lux) - Asia Ex-Japan Fund, PVE Capital latest credit strategy to launch on the Sciens managed account platform[more]

    Goldman Sachs Asset Management launches GS Long Short Fund From Marketwatch.com: Goldman Sachs Asset Management has announced the launch of the Goldman Sachs Long Short Fund, which pursues high conviction investment ideas in global equity markets through a fundamental, bottom-up approach

  3. CalPERS’ move might alter hedge fund fees for good[more]

    Benedicte Gravrand, Opalesque Geneva: When CalPERS, the California Public Employees’ Retirement System, announced on September 15th that it was unwinding its hedge-fund portfolio, it was seen by many as is a significant blow to the sector’s appeal. The Fund is

  4. Opalesque Exclusive: Institutions eye private credit over traditional fixed income[more]

    Bailey McCann, Opalesque New York: Investing in private insurance, realty tax receivables, or investment-grade short-term accounts receivable may not spring to mind as a means of mitigating risk in a portfolio, but one firm, New York-based BroadRiver Asset Management is out to change all that. Th

  5. Short-term trading quant fund beats S&P since '09[more]

    Benedicte Gravrand, Opalesque Geneva for New Managers: A relatively new multi-strategy, market-neutral quantitative hedge fund has managed to outperform the S&P500 and the HFRX Global since 2009. New Jersey-ba