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Alternative Market Briefing

Hedge fund assets under management reaches $3.56tn as of the end of Q1 2019

Thursday, July 11, 2019

Laxman Pai, Opalesque Asia:

After poor performance towards the end of 2018, investors have largely been reticent in their hedge fund investment, recording total industry withdrawals of $22.1bn in Q1 2019, Preqin said in its Insights.

The recent performance gains in 2019, however, have driven hedge fund assets under management (AUM) from $3.45tn in Q4 2018 to $3.56tn as of the end of Q1 2019, it pointed out.

Traditional markets have experienced a reversal of fortune in 2019. Following on from a turbulent end to 2018, the S&P 500 Index has gained 600 points to reach a record high as of 3 July 2019. These trends can be attributed to various macroeconomic factors and movements in the business cycle.

Ibrahim Mir of Preqin analysed how has this impacted hedge funds? Perhaps the most stated characteristic of hedge funds is their low correlation to traditional markets. However, for hedge funds that employ an equity strategy, this characteristic is often overstated.

Equity strategies hedge funds have a strong degree of correlation to traditional markets, illustrated by a three-year trailing correlation of 0.90, he said.

Equity strategies make strides

According to Preqin, equity strategies have been the best performing top-level hedge fund strategy for 2019 YTD, making gains of 6.88%, with particularly strong gains in developed markets.

North America-focused hedge funds are up 8.03% since the start of the year. At the same time, Europe-fo......................

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