Sun, Apr 19, 2015
A A A
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Industry Updates

HFR: Top hedge fund firms assume leadership in industry recovery, total AuM now at $1.67tn

Tuesday, April 20, 2010
Opalesque Industry Update - Capital inflows concentrated in industry’s largest firms; Investors continue to focus on structure, UCITS

The hedge fund industry continued the recovery that began in 2009, with the HFRI Fund Weighted Composite Index gaining +2.56 percent for 1Q 2010, bringing the industry within two percent of its previous high watermark reached in October 2007, according to data released today by Hedge Fund Research (HFR), the leading provider of hedge fund industry data.

During the quarter, investors allocated $13.7 billion of new capital to the global hedge fund industry; this combined with a performance-based asset increase of $54 billion bringing total industry capital to $1.67 trillion.

All four main strategy areas experienced asset growth in the period, led by Event Driven strategies into which investors allocated $5.6 billion of new capital. Performance for the strategy was strong as well, with the HFRI Event Driven Index up +4.7 percent for the quarter, driven by significant contributions from Activist and Distressed sub-strategies. The smallest net inflow occurred in Macro strategies, with these receiving less than $1 billion of new capital. Macro funds posted only a modest gain of +0.2 percent for the quarter, with performance undermined by commodity weakness, falling volatility and a lack of persistent trends across asset classes. Equity Hedge and Relative Value strategies also posted both asset and performance gains for the quarter, with Relative Value completing 1Q10 with 15 consecutive months of performance gains.

Inflows concentrated in largest firms

While sixty percent of all funds experienced net inflows for the quarter, inflows were concentrated in the industry’s largest firms. Investors allocated $14.9 billion to firms with greater than $5 billion in assets under management (AUM), while firms managing between $500 million and $5 billion experienced net outflows of $3.7 billion combined. The overall concentration of industry assets increased, with firms greater than $5 billion (5.1 percent of all funds) now managing over 62 percent of industry capital. Larger funds narrowly outperformed smaller funds during both 1Q10 and 2009, with the asset-weighted version of the HFRI Fund Weighted Composite Index gaining +2.8 percent and +20.3 in those periods, respectively.

The percent of funds which reached their respective high watermark in the trailing twelve months rose to 52.2 percent. In addition to an increased interest in allocating via separately managed accounts, investors continue to demonstrate interest in UCITS III complaint vehicles; HFR now tracks nearly 400 UCITS III fund products.

“In contrast to the environment of the last two years, the drivers of hedge fund performance have recently shifted to tightening corporate credit, declining equity market volatility, currency adjustments and rising sovereign credit risk,” said Ken Heinz, President of HFR. “While allocations reflect continuing trends in Event Driven & Arbitrage strategies, investors are also focusing on fund structure and transparency, as well as new opportunities presented in currency, commodity and fixed income markets.”


Chicago-based HFR Group L.L.C., founded in 1993, is a global leader in the provision of hedge fund data, research, indexation and asset management. The HFR Group of companies includes Hedge Fund Research, Inc., and HFR Asset Management L.L.C. Hedge Fund Research produces the HFR Database, considered to be the definitive source of hedge fund performance and information. HFR also distributes the HFRI and HFRX Indices – the premier benchmarks for hedge fund industry performance. www.hfr.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. Studies - Fund managers bullish on equities, alternative asset classes, Hedge funds starting to spurn emerging markets, Insurance companies take aggressive approach to hedge funds despite restricted exposure[more]

    Fund managers bullish on equities, alternative asset classes From Benefitnews.co: Asset allocation and risk continue to be the top issues for institutional investors in 2015 and, while nobody is sure what the economy will do in 2015, investment fund managers remain positive about investm

  2. Investing - New hedge fund strategy: Dispute the patent, short the stock, David Einhorn bets on AerCap as leasing company avoids turbulence, Top hedge funds reveal these best investing ideas, Hedge funds bet big on PetSmart price bump, Victory Park Capital increases investment in upstart to $500m[more]

    New hedge fund strategy: Dispute the patent, short the stock From WSJ.com: A well-known hedge-fund manager is taking a novel approach to making money: filing and publicizing patent challenges against pharmaceutical companies while also betting against their shares. Kyle Bass, head of Hay

  3. Tiger Global falls 2.9% in March, down 5.3% in Q1[more]

    From Reuters.com: Investment firm Tiger Global Management, one of the hedge fund industry's most closely watched players, told clients that its hedge fund lost 5.3 percent during the first quarter, an investor said on Wednesday. Much of the decline came in March when the fund lost 2.9 percent,

  4. It’s not just hedge funds—IMF study finds stability risks from ‘vanilla’ funds[more]

    From MarketWatch.com: Leveraged hedge funds and banklike money-market funds are the parts of the asset-management industry most associated with risks to financial stability. But a report from the International Monetary Fund suggests that “plain-vanilla” mutual funds and exchange-traded funds also ca

  5. Hedge funds gain 2.4% in Q1 driven by currency and commodity markets[more]

    Komfie Manalo, Opalesque Asia: Hedge funds posted positive results last March to conclude a strong first quarter, with performance driven by strong macro trends in currency and commodity markets, complemented by broad-based gains and positioning in event driven, equity hedge and fixed income-b

 

banner