Sun, Aug 28, 2016
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. Strategies - The 'Holy Grail' hedge fund strategy to handle a black swan the size of World War I, Hedge funds get more pushback on terms as enthusiasm for strategy wanes[more]

    The 'Holy Grail' hedge fund strategy to handle a black swan the size of World War I From IBTImes.co.uk: To illustrate a strategic gap common to today's portfolio managers, George Sokoloff, PhD, founder and CIO at Carmot Capital, proposes an interesting thought experiment – a breakdown of

  2. Institutional investors - Investors set to increase allocation to private debt, With investment income key, Richmond retirement system faces funding challenges[more]

    Investors set to increase allocation to private debt Investors are set to increase their allocation to private debt, with 60% revealing they believe the private debt market will grow over the next 12 months, according to a new study by Elian, a leading funds services provider. 41%

  3. Investing - Hedge funds snap up banks, unload Apple, Some of hedge funds' favorite stocks are finally starting to beat the market, Einhorn's Greenlight shifts positions, Treasury yield climbs to two-month high as Fischer joins hawks, 9 stocks smart investors put their money in last quarter[more]

    Hedge funds snap up banks, unload Apple From Barrons.com: Prominent hedge funds have a newfound love of big banks, and some have a distaste for shares of Apple, regulatory filings released last week show. The filings suggest that the funds have been pivoting their portfolios in recent mon

  4. Chesapeake energy seeks $1 billion loan to refinance debt[more]

    From Bloomberg.com: Chesapeake Energy Corp. is seeking a $1 billion loan as the company battered by cratering fuel prices and credit downgrades takes a step to address its $9 billion debt load. The natural gas producer hired Goldman Sachs Group Inc., Citigroup Inc. and Mitsubishi UFJ Financial Group

  5. Institutions - Nordic pension funds magnify focus on unlisted and direct investing, building up teams[more]

    From IPE.com: As bond yields remain at low or negative levels, pension funds and other institutional investors in the Nordic region are stepping up efforts to find higher returns by adding more unlisted investments to portfolios and are expanding in-house teams in order to do this, according to new