Sat, Jun 23, 2018
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. Paper: The performance of stocks actively pitched by hedge funds[more]

    Using a novel dataset drawn from investment conferences from 2008 to 2013, I show that hedge funds take advantage of the publicity of these conferences to strategically release their book information to drive market demand. Specifically, hedge funds sell pitched stocks after the conferences to ta

  2. North America - US fundraising for special purpose acquisition vehicles hits record this year[more]

    From AFR.com: Special purpose acquisition vehicles (spacs) are hitting the US market at the fastest rate on record, attracting the likes of Goldman Sachs and hedge fund investor Daniel Loeb for the two largest such deals in 2018. Spacs have raised $US4.5bn so far in 2018, the largest amount fo

  3. Investing - Man Group and AQR try to take aim at private equity industry, Hedge funds poised to be winners in AT&T-Time Warner deal[more]

    Man Group and AQR try to take aim at private equity industry From FT.com: The popularity of private equity investments has prompted asset managers such as Man Group and AQR to devise strategies that aim to replicate PE returns but at a much lower cost to investors. Both companies a

  4. News Briefs: David Stemerman's hedge fund holdings shrank before his run for governor, nvestment manager TSW triggers succession plan, Alan Howard joins Peter Thiel investing in Cologne-based fintech startup[more]

    David Stemerman's hedge fund holdings shrank before his run for governor But the U.S. holdings of Stemerman's Greenwich hedge fund, Conatus Capital, shrank from $2.6 billion at the apex to just over $1 billion before he announced his move into politics. (Hartford Courant) Inv

  5. British Empire: Pershing's 23% discount 'unsustainable'[more]

    From Citywire: The wide discount on Pershing Square Holdings (PSH) is 'unsustainable' and puts star hedge fund manager Bill Ackman under pressure, says British Empire (BTEM). Pershing is the third largest holding in the £850 million British Empire trust, managed by Joe Bauernfreund, which sp