Sun, Nov 23, 2014
A A A
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Industry Updates

Hedge funds post strong January gains as macro risks shift

Thursday, February 07, 2013
Opalesque Industry Update: Hedge funds posted strong gains in January as the resolution of the US fiscal cliff and investor optimism regarding the European banking and sovereign debt crisis drove gains across all hedge fund strategies to begin 2013, according to data released today by HFR. The HFRI Fund Weighted Composite Index rose by +2.8 percent, the seventh gain in the last eight months and the strongest monthly gain since January 2012. Fund of Hedge Funds gained +2.5 percent, their third consecutive gain and sixth in last seven months.

Equity Hedge led all strategies as global equity markets rallied across nearly all regions, with the HFRI Equity Hedge Index gaining +3.7 percent for January. Gains were also distributed broadly across Fundamental Value, Growth and Quantitative Directional strategies, with these returning +4.5, +3.8 and +3.8 percent, respectively. Short-selling strategies were the lone sub-strategy to decline in January, losing -3.7 percent.

Fixed income-based Relative Value Arbitrage (RVA), the leading area of strategy performance in 2012, extended recent gains as the HFRI Relative Value Index gained +2.5 percent in January, the strongest monthly gain since September 2010. Significantly, RVA gains also occurred through an environment of increasing yields in most developed markets globally. Event Driven (ED) strategies also posted strong gains as activist positioning in Herbalife and other dynamic M&A situations contributed to performance, with the HFRI Event Driven Index advancing +2.2 percent, the eighth consecutive monthly gain for the Index and the strongest month since January 2012.

Currency volume soared in January in response to catalysts of inflation targeting by the Bank of Japan and falling sovereign yields across Italy, Spain and Greece driving the Euro to a 14-month high against the US dollar. The HFRI Macro Index gained +1.6 percent, only the second monthly gain in last six months and the strongest gain since April 2011, with positive contributions across Quantitative, Discretionary, Commodity, Currency and Emerging Markets exposures. The HFRI Macro Systematic Diversified/CTA Index gained +1.9 percent, improving on a disappointing decline of -2.5 percent for 2012, while the HFRI Emerging Markets Index gained +3.4 percent, improving on last year’s gain of +10.3 percent.

“Hedge fund performance in January reflects an important shift in the driver of financial market performance from the macro and political uncertainty which dominated 2012 to fundamentally driven, mean-reverting factors including growth, earnings and relative valuation,” stated Kenneth J. Heinz, President of HFR. “Macro risks have been reduced, but not eliminated, creating a compelling environment for hedge fund performance as investors remain sensitive to these risks, but are also increasing opportunistic with regard to positioning and performance generation. This shift toward fundamentals and increasing risk tolerance is likely to provide a powerful catalyst to hedge fund performance in 2013.”

HFR

Press Release

BM

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. Greenlight Re CEO says hedge fund reinsurance strategy buzz is validating[more]

    From Artemis.bm: The attention being paid to the hedge fund reinsurance business model and the fact that others are now looking to leverage bits of it within their own strategies, is validating for reinsurer Greenlight Capital Re, according to CEO Bart Hedges. There has been an increasing buzz

  2. Legal - Hedge fund manager fights £8m tax tribunal ruling[more]

    From FT.com: A hedge fund manager who may have to repay £8m in tax is trying to overturn a tribunal ruling that found he had attempted to shelter millions in an avoidance scheme. Patrick Degorce, chief investment officer at Theleme Partners, lost a tax tribunal case last year. HM Revenue & Customs c

  3. Europe - Hedge funds face exit tax as Iceland central bank discusses plan[more]

    From Bloomberg.com: Hedge funds and other creditors with claims against Iceland’s failed banks face an exit tax as the island looks for ways to unwind capital controls without hurting the economy. The government targets having a plan it can present by year-end that would map out how Iceland will sca

  4. Investing - George Soros puts $500m of his money on Bill Gross, Soros, Paulson backed Hispania Activos mulls Realia takeover, Ex-Credit Suisse trader’s hedge fund sees yen shorts as crowded, Hedge hunters double default-swaps as views split, Large hedge fund positions come under pressure, Vikram Pandit's fund picks 50% stake in JM Financial's realty lending arm for $87m[more]

    George Soros puts $500m of his money on Bill Gross From WSJ.com: Before Bill Gross was fully settled in at his new firm, Janus Capital Group Inc., he received an unlikely visit from the chief investment officer of famed investor George Soros ’s firm, according to a person familiar with t

  5. Hedge fund Oceanwood raises $2bn, to close to new investors[more]

    From Reuters.com: Europe-focused hedge fund Oceanwood Capital Management is closing its fund to new investors after its assets under management hit $2 billion (1 billion pounds) recently, a source with direct knowledge of the matter said. Oceanwood, a multi-strategy hedge fund spinout from Tudor Gro