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Despite ending the year in the red, hedge fund managers recorded their best outperformance over the global equity markets since 2011, as they returned 7.70% more than the MSCI ACWI IMI (USD) throughout 2018.

The MSCI ACWI Investable Market Index (IMI) captures large, mid and small cap representation across 23 developed markets and 24 emerging markets countries. With 8,725 constituents, the index covers approximately 99% of the global equity investment opportunity set. It was down 9.6% in 2018.

Historically, the Mizuho-Eurekahedge Index (USD) has outperformed underlying equity markets during periods of market distress, such as the years 2008 and 2011, during which the index outperformed global equity markets by 28.52% and 7.80% respectively.

Launches and closures

A total of 601 fund launches and 613 liquidations were recorded in 2018, marking a third consecutive year in which fund closure activities outpace launches.

Among these newly launched funds, 55.7% charged no less than 20% performance fees, compared to 45.8% back in 2017. However, both figures are still significantly lower than what was observed prior to the financial crisis, during which an overwhelming majority of hedge funds charged 20% performance fees or higher.

Source: Eurekahedge

Hege fund performance by region (2018 YTD)

Source: Eurekahedge

Hedge Fund Performance by Strategy (2018 YTD)

Source: Eurekahedge

Hedge Fund 2018 Monthly Returns Distribution

Source: Eurekahedge

Proportion of Fund Launches with >20% Performance Fees

Source: Eurekahedge

Hedge Fund Launches and Closures

Source: Eurekahedge

Source: Eurekahedge

B. G.