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Alternative Market Briefing

Event-driven hedge funds outperform in Q1

Tuesday, April 04, 2017

Komfie Manalo, Opalesque Asia:

Hedge funds posted a modest return in March as the Lyxor Hedge Fund Index 0.5% returned last month and finished the first quarter up 1.1%. Event-Driven strategies outperformed, supported by merger arbitrage and special situations. The Event Driven Broad Index was flat in March but gained 2.1% in Q1, Lyxor Asset Management said in its Weekly Briefing.

Lyxor AM Senior Strategist Philippe Ferreira commented, "From our perspective, event-driven remains a highly attractive strategy going forward. Exposures are balanced between cyclical and defensive sectors (though there has been a tilt toward adding to cyclicals lately), thus preventing any major reversal in market optimism from causing losses on event-driven portfolios. CEO confidence is at a decade high which is likely to translate into stronger corporate activity."

Lyxor added that in general, hedge funds were also up during the period under review. Most strategies were up in Q1 and within event-driven, special situations funds made the most gain. Activists have particularly thrived, with leading players in this space up in the range of +4-5% year to date. Meanwhile, market neutral L/S equity funds extended their recovery from 21 - 28 March. The Lyxor L/S equity market neutral index is up +3.3% year to date after having delivered disappointing returns last year.

Finally, exposure to Japan hurt both CTA and Macro managers. Short exposu......................

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