Wed, Apr 16, 2014
A A A
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Industry Updates

HFN: Investors allocate $4.51bn to hedge funds in January

Monday, February 15, 2010
Opalesque Industry Update - Below are early estimates for January 2010 hedge fund asset flows and performance. A full report will be available later in the month.

Highlights:

Performance losses reduced total hedge fund assets, but investor flows were net positive in January; a positive sign for the industry. Aggregate industry performance was significantly better than broad equity markets.

  • Total hedge fund assets decreased -0.14% to an estimated $2.038 trillion, performance losses were the main cause of the reduction.
  • Investors allocated $4.51 billion to hedge funds in January, performance reduced assets by $7.27 billion resulting in total assets falling $2.76 billion during the month.
  • Investor flows were positive in January for the eighth month in the last nine. There was a slight outflow in December due to year-end redemption trends.
  • The Core Growth Rate (% increase in assets due solely to investor flows) was +0.22% in January.
  • Hedge fund assets are still $900 billion below the peak set in Q2 2008.

Hedge fund performance was negative in January, but the average of all funds outperformed equity markets significantly. Poor returns from commodity and equity focused funds more than offset positive returns from funds focusing on fixed income and FX markets.

  • The HFN Hedge Fund Aggregate Index was -0.81% in January 2010 after rising +19.43% in 2009.
Details from January:

Assets:

  • Allocations to fixed income strategies were positive in January with mortgage related strategies having the highest core rate of growth.
  • Investor flows caused net redemptions from equity and commodity focused funds.
  • Global macro, fixed income arbitrage and distressed funds had the highest rate of inflows in January.
  • Multi-strategy, CTA/managed futures and long/short equity all experienced net outflows in January.
  • Emerging markets strategies had slight net inflows.

Performance:

Regional/Country Specific Exposure:
Funds investing in Japan produced the best average performance of any regional exposures in January. Funds investing in Russia and the Middle East/North Africa regions also produced positive returns to begin the year. Broad emerging market returns were down in January, led by funds investing in Brazil, then China and India. The HFN Emerging Markets Index was -0.91% in January.

HFN Japan Index:                    +1.76% in January, +5.76% in 2009

HFN Russia Index:                   +1.70% in January, +63.09% in 2009

HFN Middle East/North Africa Index: +1.08% in January, +22.20% in 2009

HFN Latin America Index:            -2.98% in January, +46.43% in 2009

HFN India Index:                    -3.11% in January, +52.09% in 2009

HFN China Index:                    -3.46% in January, +41.05% in 2009

HFN Brazil Index:                   -3.74% in January, +51.80% in 2009

HFN Emerging Markets Index:         -0.91% in January, +43.62% in 2009

Fixed Income (FI) Strategies
The average performance from fixed income focused strategies was +1.60% in January. Performance was led by mortgage related strategies and funds investing in distressed securities.

HFN Mortgages Index:              +3.09% in January, +57.01% in 2009

HFN Distressed Index:             +1.70% in January, +29.72% in 2009

HFN Fixed Income Arbitrage Index: +1.45% in January, +20.71% in 2009

Equity (EQ) Strategies
The average performance from equity focused strategies was -0.67% in January. Despite being down on average in January, long/short equity fund outperformance over the S&P 500 TR Index was the greatest in the last 11 months. Market neutral, short bias and small/micro cap strategies all produced positive aggregate returns.

HFN Short Bias Index:            +2.24% in January, -20.17% in 2009

HFN Market Neutral EQ Index:     +0.85% in January, +4.56% in 2009

HFN Long/Short Equity Index:     -1.11% in January, +21.87% in 2009

HFN Healthcare Sector Index:     -0.49% in January, +28.12% in 2009

HFN Energy Sector Index:         -0.87% in January, +40.71% in 2009

Commodity and Foreign Exchange (FX) Related Strategies
CTAs and commodity focused managers had a very difficult start to 2010. Sharp declines in energy and agricultural commodities’ prices appear to have caused losses across many portfolios.

Foreign Exchange focused funds:               +0.18% in January, +1.32% in 2009

Financial Futures focused funds:              -1.41% in January, +11.92% in 2009 

HFN CTA/Managed Futures Index:                -3.52% in January, +1.83% in 2009

Commodity ex-Financial Futures focused funds: -3.19% in January, +3.05% in 2009

Corporate website: www.hedgefund.net

- FG

What do you think?

   Use "anonymous" as my name    |   Alert me via email on new comments   |   
Banner
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. CTAs could face new challenges in a rising rates environment[more]

    Bailey McCann, Opalesque New York: CTAs have taken a beating performance wise lately, and asset flows reports show that investors aren't sticking around to see how the movie ends. Now, a new white paper from Roy Niederhoffer and Coen Weddepohl notes that as interest rates start to tick back u

  2. Investing – Big hedge funds bought Puerto Rico's junk bonds, Fidelity explores new trading venue amid flash trade concerns, Crisis-era Greek bonds reward early buyers with big effective returns, Cargill unit discloses stake in Freddie preferred[more]

    Big hedge funds bought Puerto Rico's junk bonds From Reuters.com: Several large hedge funds doubled down on Puerto Rico in last month's giant bond sale despite the U.S. territory's financial struggles, the Wall Street Journal reported, citing confidential documents reviewed by the newspa

  3. Commodities – Popular value fund manager David Iben bets on Russia, gold,[more]

    From Reuters.com: With large bets on Russia and North American gold miners, one of the best performing stock pickers in the wake of the 2008 financial crisis is back with a new fund that reflects his deep aversion to following the crowd. In the Kopernik Global All-Cap Fund, David Iben is follo

  4. Opalesque Exclusive: Pensions, endowments, family offices reconsider life settlement investments[more]

    Bailey McCann, Opalesque New York: Hedge funds were once the largest investors in the life settlement industry, now the industry is seeing more interest from pensions, endowments and family offices directly. Life settlements have always been considered a niche part of the investing landscape, an

  5. SEC allows investment funds to use social media[more]

    Bailey McCann, Opalesque New York: The Securities and Exchange Commission (SEC) has released new guidance letting investment funds and advisors use social media to promote client reviews. The guidance seeks to assist investment managers in developing compliance policies and procedures reasonably