Mon, Sep 22, 2014
A A A
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Industry Updates

HFR: Number of emerging markets hedge funds reached record high in Q2-2012 (1,073 funds, up 3.5% since Q2-2011)

Thursday, August 23, 2012
Opalesque Industry Update – The number of Emerging Markets (EM) hedge funds reached a record high in 2Q12, overcoming the headwinds of volatile performance and investor redemptions, according to the latest HFR Emerging Markets Hedge Fund Industry Report, released today by HFR, the global leader in the indexation and analysis of the global hedge fund industry.

The total number of EM hedge funds increased to 1,073 funds, approximately 14 percent of all hedge funds and an increase of 3.5 percent since 2Q11.

Despite the increase in the number of funds, total EM hedge fund assets declined by 3 percent from the 1Q12 record, falling by $3.7 billion to finish 2Q12 at $123.5 billion. This AUM decline was primarily performance-based as the HFRI Emerging Markets Total Index declined by -6.05 percent for the quarter, offsetting gains from 1Q12. Investors also withdrew a modest $256 million in 2Q, or approximately 0.2 percent of total EM hedge fund assets.

Despite both Euro-centric and local market volatility in 2Q12, EM hedge funds continue to exhibit strong performance dynamics, both relative and absolute, through the first seven months of 2012. Across EM regions, funds investing Latin America have posted the strongest gains, with the HFRI EM: Latin America Index gaining +3.9 percent YTD through July, topping a decline in the Bovespa Index over the same period. Similarly, the HFRX Russia/Eastern Europe Index posted a gain of +2.3 percent YTD through July, also topping a decline in Russian equities. The HFRX MENA Index produced a gain of +2.7 percent YTD through July, generally in line with regional MENA equity markets. HFR recently announced the launch of the HFRX Emerging Markets Index, which includes exposure across all EM regions and hedge fund strategies; the Index provides daily performance transparency and has posted a gain of over +5.7 percent YTD through August 17.

While EM hedge fund capital continues to be predominantly focused on Fundamental Growth strategies, the industry continues to evolve with new offerings focused on Currency, Fixed Income and more sophisticated Equity Hedge (EH) strategies. Macro hedge fund strategies, which include both Discretionary and Quantitative/Systematic CTA strategies have increased in number to the point where they now account for nearly 13 percent of all EM hedge funds, an increase of nearly 2 percent over YE 2011.

Capital invested in fixed income based Relative Value Arbitrage strategies has also grown to nearly 10 percent of all EM hedge fund capital, with increases across both FI: Sovereign and FI: Corporate sub-strategies. The core EM hedge fund strategy of EH: Fundamental Growth increased to nearly 60 percent of all EM hedge fund capital as of 2Q12, with EM hedge funds also executing on Value, Equity Market Neutral and Energy/Basic Materials sub-strategies.

“Emerging Markets hedge funds delivered compelling performance in both an absolute and relative sense through the two distinct market cycles of the first two quarters of 2012, producing strong gains in the risk-on environment of 1Q12 and preserving those gains through the risk-off environment of the second quarter”, stated Kenneth J. Heinz, President of HFR. “These powerful trends of strategic sophistication and performance transparency, which will continue to define EM hedge funds in coming quarters, are effectively and efficiently captured by the new HFRX Emerging Markets Index.”

In addition to the HFRX Emerging Markets Index, HFR launched two additional HFRX Indices, expanding the number of indices in the HFRX family to 76. Consistent with many of the current HFRX Indices, each of the new indices includes daily performance transparency. Additional details below:

HFRX Emerging Markets Composite Index includes multiple hedge fund strategies with geographic exposure to one or more Emerging Markets regions and combination of asset classes with emphasis on global macroeconomic, political or specific secular market growth trends.
HFRX Fixed Income - Credit Index includes strategies with exposure to credit across a broad continuum of credit sub-strategies. The investment thesis across all strategies is predicated on realization of a valuation discrepancy between the related credit instruments.
HFRX MLP Index includes Master Limited Partnership strategies which are typically exchange listed partnerships that engage in certain businesses, mostly pertaining to the transportation, extraction and storage of certain commodities and natural resources including, but not limited to, oil, natural gas and coal.

(press release)

HFR (Hedge Fund Research, Inc.) is the global leader in the alternative investment industry, specializing in the indexation and analysis of hedge funds. www.hfrx.com

Bg

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. SEC charges 19 investment firms and one trader for breach of Rule 105[more]

    Benedicte Gravrand, Opalesque Geneva: The Securities and Exchange Commission (SEC) started a push to enhance the enforcement of Rule 105 of Regulation M last year to uncover hedge funds and private equity firms that have illegally participated in an offering of a stock after short selling it duri

  2. Fund managers, bullish on Europe, anticipate monetary policy separation of Fed and ECB[more]

    Komfie Manalo, Opalesque Asia: At least 202 fund managers with $556bn of assets under management said that while the European Central Bank (ECB) has eased its monetary policy that sent sentiments towards Europe to pick up, the Fed is expected to hike its rate in the spring of 2015. Investor

  3. Institutions - North Carolina workers call on state pension to dump up to $6bn in hedge funds, UK pension fund criticizes hedge fund fees[more]

    North Carolina workers call on state pension to dump up to $6bn in hedge funds From Forbes.com: The State Employees Association of North Carolina this afternoon called on state Treasurer Janet Cowell to withdraw all investments in hedge funds, which appear to amount to approximately $6 b

  4. News Briefs - Limited partners of investment managers may be subject to self-employment taxes, Just one week left until NYC's Rocktoberfest[more]

    Limited partners of investment managers may be subject to self-employment taxes On September 5, 2014, the Internal Revenue Service (“IRS”) issued Chief Counsel Advice 201436049, concluding that members of an investment manager were subject to self-employment taxes with respect to their e

  5. Institutions - Adviser's faith in hedge funds unshaken by CalPERS' move Advisers weigh in on CalPERS’ decision, Gina Raimondo sees no reason to follow California’s lead, exit hedge funds, Danish pension funds step up 'alternative investments'[more]

    Adviser's faith in hedge funds unshaken by CalPERS' move From WSJ.com: Financial advisers who use hedge funds in their clients' portfolios say they aren't rethinking that approach after a huge California pension fund announced plans to exit the hedge-fund market. The decision by the Cali