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Alternative Market Briefing

Global hedge funds' performance declined 1.47% during Q1 2022

Friday, April 22, 2022

Laxman Pai, Opalesque Asia:

Q1 2022 ended up being one of the most challenging quarters for hedge funds with the strong 2021 momentum coming to an end, said a study.

The asset class declined 1.47% during the quarter, making this year's decline the worst post-Global Financial Crisis (GFC) and the third-lowest first-quarter return ever recorded by Preqin.

Preqin's Q1 2022 Hedge Fund shows hedge funds were affected by geopolitical factors and turmoil in the markets, posting lower returns during the quarter compared to its strong 2021 performance.

"High inflation numbers, along with changes in monetary policies, geopolitical tensions - in particular on the back of the military conflict in Ukraine - and soaring energy prices, all resulted in elevated levels of volatility and significant turmoil in the global markets," the report said.

Though in the historical context, Q1 performance was certainly disappointing, hedge funds managed to guard investors against major pullbacks.

Preqin data shows that despite the pressure, macro and multi-strategy hedge funds were the best performing top-level strategies, returning +5.74% and +1.15% respectively in Q1 2022. Of the two, the star of the show was certainly macro strategies, which generated positive returns in every month of Q1 2022; while relative value (-0.45%) and event-driven (-0.98%) shielded allocators from volatility in Q1.

Conversely, despite the recovery in equity markets, equity strategi......................

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