Fri, Dec 19, 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   |   
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 - Big hedge funds win again on PetSmart, Riverbed, RBS sells real estate loans to hedge fund Cerberus, Talisman energy speculation: Which hedge funds could benefit?[more]

    Big hedge funds win again on PetSmart, Riverbed From CNBC.com: Another week, another set of wins for activist investors. On Sunday, pet supply retailer PetSmart agreed to the largest leveraged buyout of the year at $8.7 billion. Hedge fund firm JANA Partners had been pushing for a sale a

  2. Outlook - Hedge fund manager who remembers 1998 rout says prepare for pain, Bond guru Bill Gross predicts U.S. economic growth to dip to 2%[more]

    Hedge fund manager who remembers 1998 rout says prepare for pain From Bloomberg.com: Stephen Jen landed in Hong Kong in early January 1997 as Morgan Stanley’s newly minted exchange-rate strategist for Asia. He was soon working around the clock when investors began targeting the region’s

  3. Opalesque Exclusive: U.S. legal receivables fund launched in August[more]

    Benedicte Gravrand, Opalesque Geneva for New Managers: Investing in asset-backed receivables is a strategy that has been an integral part of the alternative investment space within the overall fixed income asset c

  4. Comment - High fees and low performance hit hedge funds[more]

    From FT.com: Disenchantment over high fees and lackluster performance may finally be turning the tide against hedge funds, fresh data suggest. Despite generally weak returns since the global financial crisis, hedge funds have enjoyed positive net inflows every year since 2010. This helped assets und

  5. Performance - Lansdowne, Man Group, other hedge funds profit from shorts in oil, Turmoil boosts hedge funds that bet against Russia, oil, CTAs post strongest returns since December 2010[more]

    Lansdowne, Man Group, other hedge funds profit from shorts in oil From Valuewalk.com: The rising short interest in oil companies implies that the worst for oil is yet to come. Data from Markit shows that short exposure in energy sector of S&P 500 is still looming close to the highest mar