Wed, Feb 21, 2018
A A A
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Industry Updates

eVestment reports large funds enjoyed good returns while credit funds continued with an excellent year

Thursday, September 06, 2012
Opalesque Industry Update - eVestment|HFN announced the release of their August hedge fund industry report. The report shows that hedge funds posted their third consecutive month of positive performance in August returning an average of 0.7% and pushed aggregate performance to positive 4.1% for the year. Large funds, those with greater than $1 billion in AUM, posted an average return of 1.9%, their best month since January. Updated asset flow estimates point to elevated investor outflows in July, $11.8 billion, as total hedge fund assets touched $2.52 trillion.

Data contained in the report is as reported to the proprietary evestment|HFN research dataset which includes more than 22,500 active and historical products and $1.7 trillion in strategy assets. eVestment’s combined research and traditional institutional datasets cover 53,200 products with more than $14 trillion current assets under management.

Credit Strategies Continued to Roll as Euro Strength Hurt Managed Futures Funds
Managed futures and FX focused funds were the primary drag on August returns with both groups reporting negative results for the month, down 1.0% and 0.2%, respectively. Directional equity, including long/short and event driven strategies, reported their best months since February, returning 1.3% and 1.1%, respectively, while funds targeting opportunities in credit markets continued what is turning into a very strong 2012, up 1.2% in August and 7.4% YTD.

“The low volatility rally in August, driven in part by verbal support for the Eurozone’s struggling sovereigns from the ECB, benefited long-biased equity exposures in August, but investors have not shown confidence in the space,” stated Peter Laurelli, CFA, head of eVestment Alliance’s industry research division. “Instead, there have been massive flows into credit strategies over the last seven months, nearly $23 billion, which has been rewarded with excellent returns.”

Mr. Laurelli adds, “Institutional investors across hedge funds and traditional managed accounts have actively reduced exposure to equity markets and increased exposure to credit related strategies throughout the year. This demand for yield and safety in credit markets has been a positive structural return driver.”

Large Funds Show Signs of Strength
For much of this year, many large funds have not produced returns on par with the industry average despite gaining the vast majority of new allocations, but that changed in August. Several of the larger equity focused managers surged during the month and the average return from these funds was nearly 3%, easily surpassing the S&P 500 TR. Median returns from large firms across all strategies were higher than the industry average in August with median performance reaching 2.2%, the group’s second best month in the last year.

“While August may not be representative of the remainder of the year, many of these firms have received large new allocations through the year and it is good for the industry for these strategies to show they are able to produce above average returns at times,” noted Mr. Laurelli.

Outlook for the Remainder of 2012
With the bulk of investor flows in 2012 having gone to towards credit, macro multi-strategy funds, and focused towards the largest firms in each category, investors appear prepared for adversity. With Europe’s leaders returning to face their issues with bold headlines and a tight U.S. presidential election preceding the country facing its “fiscal cliff”, a return of volatility may highlight the value hedge funds have been promoting all year.

Press release

bc

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. Art & Motion launches collectible car alternative investment vehicle[more]

    Komfie Manalo, Opalesque Asia: Luxembourg-based Art & Motion has launched a new investment vehicle dedicated to vintage cars and exceptional high-quality vehicles as this collectible market has grown exponentially the turn of the centu

  2. Opalesque Exclusive: Global Sigma captures February's long-vol trade[more]

    Bailey McCann, Opalesque New York for New Managers: Florida-based Global Sigma rode February's volatility to new highs. The firm's AGSF strategy is up +2.8 percent through February 16 and +4.2 percent YTD a

  3. Institutional Investors - Hedge funds regain their appeal for a $57 billion asset manager, Private credit strategies in stratosphere[more]

    Hedge funds regain their appeal for a $57 billion asset manager From Bloomberg.com: With volatility back on the radar, one of the Nordic region's biggest asset managers is considering relying a bit more on hedge funds to help oversee his portfolio. Mikko Mursula, the chief investment off

  4. Investing - All aboard for hedge funds as trade tide lifts shipping, Hedge funds pile into Time Warner in bet on merger success[more]

    All aboard for hedge funds as trade tide lifts shipping From Reuters.com: Forced to abandon ship after mistiming their investments five years ago, hedge funds are venturing back in a bid to profit from growing global trade flows. Around 90 percent of traded goods by volume are tran

  5. Investing - Hedge funds turn short on tech just as stock rally takes off, After biggest short, speculators slash bearish US bond bets as supply deluge looms[more]

    Hedge funds turn short on tech just as stock rally takes off From Newsmax.com: A key group of investors has just missed out on the biggest tech-stock rally since 2014. Hedge funds and other large speculators turned net short on Nasdaq 100 Index futures for the first time in 21 months, ac