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Equity hedge fund market share plunges to to 46% in Q1 of 2018: Barclays' Capital Solutions

Friday, October 12, 2018

Laxman Pai, Opalesque Asia:

Equity hedge funds' share of the overall industry asset-under-management has been decreasing, said a new study titled 'Finding Alpha' conducted by Barclays' Capital Solutions.

The growth rate of Equity hedge funds since 1999 has lagged the overall hedge fund industry (9% vs. 11%, respectively), resulting in a decline in overall Equity hedge fund market share from 63% in 1999 to 46% in the first quarter of 2018.

"Equity hedge funds, often considered a core hedge fund strategy, have seen their fair share of ups and downs as the hedge fund industry has grown. Since the Global Financial Crisis, monetary easing and rising equity markets have made it difficult for Equity hedge funds to outperform their benchmarks," the team that analysed performance data of more than 5,000 funds based on their holdings, surveyed 30 Equity hedge fund managers said.

The decline of Equity hedge fund market share in the post-crisis period has been driven in large part by investor allocations to non-Equity strategies. Since 2010, non-Equity strategies have received $212 billion in inflows compared to $71 billion for Equity strategies.

When looking at the various Equity hedge fund sub-strategies, Long-Short is the only sub-strategy that experienced net outflows since 2010, it said.

High dispersion in manager performance also means many hedge funds generated high levels of alpha

"We reviewed performance in order t......................

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