Wed, Jan 28, 2015
A A A
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Industry Updates

Emerging markets hedge funds navigate turmoil, uncertainty to produce strong gains

Friday, August 29, 2014
Opalesque Industry Update - Hedge funds investing in Emerging Markets posted strong gains through mid - year , increasing total EM hedge fund assets to an eighth consecutive quarterly record, despite a sovereign debt default by Argentina and continuing geopolitical uncertainty in Ukraine, Syria, Israel, Iran and Iraq. Total hedge fund capital invested in Emerging Markets hedge funds increased to over $184 billion (1.13 trillion RMB, 421 billion Brazilian Real, 6.65 trillion Russian Rouble, 690 billion Riyal, 11.1 trillion Indian Rupee), according to the latest HFR Emerging Markets Hedge Fund Industry Report, released today by HFR, the established global leader in the indexation, research and analysis of the global hedge fund industry.

The asset increase of $9 billion of total EM Assets was entirely performance - based, with EM funds experiencing a minor net asset outflow of less than $200 million, while t he total number of EM hedge funds increased to over 1,150, a new record.

The HFRX Russia Index posted a gain of +13.8 percent in 2Q14, recovering the steep loss of - 12.5 percent from 1Q14 and topping the YTD decline of Russian equities by approximately 1,000 basis points. Similarly, the HFRI Russia/Eastern Europe Index, which includes an even wider base of regional hedge fund strategies, gained +7.0 percent in 2Q, nearly recovering the decline of - 8.0 percent from the volatile 1Q. As a result of the strong performance gains, total global hedge fund capital invested Russian and Eastern Europe increased to more than $26 billion, a new record.

Hedge funds investing in Emerging Asia also produced strong gains, with the HFRX India Index up +18.5 percent for the period, extending the YTD gain of the volatile India Index to +26.7 percent. The HFRI China Index gained +0.9 percent in 2Q and +2.90 percent in July, erasing 1Q losses and extending the YTD gain to +1.0 percent. Total global capital invested in hedge funds focusing on Emerging Asia increased to nearly $50 billion, while the number of funds increased to over 520.

Despite an escalation of regional geopolitical turmoil and military activity, the HFRX MENA Index returned +2.3 percent in 2Q, bringing YTD performance, inclusive of a July gain, to +3.1 percent. Approximately 50 hedge funds managing nearly $4.2 billion in vest with a dedicated focus on the Middle East. Similarly, despite the expectations for, and eventual reality of, sovereign default by Argentina, the HFRX Latin America Index gained +5.8 percent in 2Q14; inclusive of a subsequent decline of - 1.0 in July, the LatAm Index has gained +2.8 percent YTD 2014. Over 100 fund s collectively managing over $11 b illion invest with a dedicated focus on Latin America.

“Emerging Markets hedge funds posted a strong recovery from early year losses in the second quarter, providing additional and further evidence of strong EM hedge fund performance available to investors which have the sophistication, risk and volatility tolerance required to monetize these gains,” stated Kenneth J. Heinz, President of HFR. “Despite recent gains for broad market indices in both e merging and developed markets, multiple geopolitical catalysts for market volatility remain salient to global investors, including fluid situations in Syria, Iran, Iraq, Israel, and Ukraine/Russia. EM hedge funds offer global investors the best opportunity to access the most opportunistic, tactical exposure to volatile, dynamic trends across EM equity, currency and fixed income exposures, and these powerful trends are likely to drive continued record assets to EM hedge funds in 2H14.”
PD

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 - U.S. investors favor currency hedged Europe ETFs as euro tumbles, Quants win back investors as Swiss franc fuels volatility gains, David Einhorn's $7bn hedge fund is loading up on this stock, Hedge fund BlueMountain Capital unveils Ocwen Financial short, claims default on notes[more]

    U.S. investors favor currency hedged Europe ETFs as euro tumbles From Reuters.com: U.S. investors stung by the falling euro who want to stay invested in Europe are turning to exchange-traded funds designed to strip out the impact of the region's currency. The biggest among so-called "cur

  2. News Briefs - Millennials use tech tools to jump into investing, Winklevoss twins to launch bitcoin exchange with FDIC insured deposits, Robertson’s legacy from hedge funds to New Zealand, Real estate managers exploring smaller open-end funds[more]

    Millennials use tech tools to jump into investing It is the Facebookification of monetary investing. From social networking platforms that enable young investors to stick to every other's stock-picking mojo, to internet sites for initially-timers hungry for a piece of the Silicon Valley

  3. Owen Li 'truly sorry' for blowing up $100m of hedge fund’s assets[more]

    From CNBC.com: A hedge fund manager told clients he is "truly sorry" for losing virtually all their money. Owen Li, the founder of Canarsie Capital in New York, said Tuesday he had lost all but $200,000 of the firm's capital—down from the roughly $100 million it ran as of late March. "I take r

  4. Indices - Barclay CTA Index gains 7.71% in 2014; largest traders return 12.31% for the year, Wilshire Liquid Alternative Index family outperforms investable hedge fund index counterparts in 2014[more]

    Barclay CTA Index gains 7.71% in 2014; largest traders return 12.31% for the year The Barclay CTA Index compiled by BarclayHedge gained 7.71% in 2014. The Barclay BTOP50 Index, which measures performance of the largest CTAs, was up 12.31% in 2014. “The BTOP50 had a strong finish, e

  5. Opalesque Exclusive: Ex-Citi trader launches 'sleep-at-night’ long/short equity fund[more]

    Benedicte Gravrand, Opalesque Geneva for New Managers: After working at Citi's proprietary trading desk, managing a large portfolio between 2008 and 2011, Joel S. Salomon founded SalauMor Management in New York