Opalesque Industry Update - Preqin's latest research examines two ways of defining emerging
hedge funds (EHFs)
;
'small' first
-
time funds with
$300mn or less in AUM, or
'
new
'
first
-
time funds with a
three
-
year track record or less. Preqin
finds
that each group
has posted higher return
s
across
12
-
month and 3
-
& 5
-
year annualized horizons
compared to the wider fund industry
.
'New' EHFs in particular have posted higher rolling 12
-
month performance than the wider industry for most of the past
five years. While this level of performance has
historically been accompanied with a higher level of volatility,
three
-
year volatility for 'new' EHFs has converged with that of the wider industry in 2017. Key Emerging Hedge Fund Facts
Amy Bensted , Head of Hedge Fund Products : "After seeing outflows across 2016, improved recent returns have resulted in investor inflows to the hedge fund industry for the first time in five successive quarters in Q1 2017. This has set the tone for emerging managers in the asset class ; with the past performance of first - time funds stronger than that of the wider hedge fund industry, now could be a prime opportunity for new hedge fund managers. Notably, newer funds (those with a track record of three years or less) have generated strong returns, achieving higher net gains than small funds. This stronger performance may encourage institutional investors to look past t he risks of these first - time funds and find opportunities with emerging managers. Indeed, the volatility of funds with a track record of three years or less has decreased and converged with that of the wider hedge fund industry, indicating that investors c an access the better returns these funds may present with a comparable level of investment risk. " |
Industry Updates
Emerging hedge funds outperform established peers
Thursday, July 06, 2017
|
|