Tue, Dec 12, 2017
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. Mediobanca acquires majority stakes in Swiss hedge fund[more]

    Komfie Manalo, Opalesque Asia: Listed diversified banking group Mediobanca SpA said it has acquired a majority stake in Geneva-based hedge fund firm RAM Active Investments SA (RAM AI), an active and alternative asset manager offering a range of act

  2. News Briefs - Italy's Carige to sell consumer credit arm to Chenavari, Less than a year after hedge fund coup, East Bay drug maker cuts jobs, looks to move HQ[more]

    Italy's Carige to sell consumer credit arm to Chenavari Italy's Banca Carige aims to sell its consumer credit unit to London-based hedge fund Chenavari by Dec. 6 when a vital 560 million euro ($664 million) cash call ends. Genoa-based Carige must comply by the end of the year with Europe

  3. Launches - Ex-BlueCrest team to open over $200m hedge fund, Greg Coffey, a hedge fund star who retired at 41, is eyeing a comeback, Brevan Howard plans Greek funds as bond rally signals revival[more]

    Ex-BlueCrest team to open over $200m hedge fund From Bloomberg.com: A team of traders who left BlueCrest Capital Management earlier this year raised more than $200 million for their own hedge fund focused on Asian stocks, according to a person familiar with the matter. Ovata Capital Manag

  4. North America - Miami could attract hedge funds if SALT deductions axed[more]

    From Law360.com: For years, inertia has been Nitin Motwani's greatest foe in his attempts to lure hedge fund owners in the northeast to Miami, which he has pitched as a tropical low-tax paradise. But with the Republican tax bill proposing to eliminate deductions for state and local taxes, he's sensi

  5. Northleaf Capital Partners closes debut private credit fund on $670M[more]

    Bailey McCann, Opalesque New York: Northleaf Capital Partners has closed its debut private credit fund - Northleaf Private Credit I - on $670 million. The vehicle will invest in private credit transactions in Europe and North America, with a primary focus on lending to private equity-backed compa