Sat, Jan 22, 2022
A A A
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Industry Updates

Hedge fund returns varied in March amid elevated volatility, says eVestment

Wednesday, April 15, 2020
Opalesque Industry Update - March was a highly volatile and dramatic month, not just for global financial markets and the hedge fund industry, but for humanity.

"During the global financial crisis, financial systems were at risk of failing, whereas in March and ongoing, we face larger failures. With the understanding that these are delicate times for all, the following is a look at hedge fund performance amid a global crisis," said Peter Laurelli, CFA, eVestment Global Head of Research.

Hedge funds lost an average of -7.25% in March 2020 bringing YTD returns to -9.87%. March's average loss was the second largest on record, and largest since the height of the global financial crisis in October 2008 when the average fund lost between 8%-9%.

Funds focused on securities within the corporate capital structure, particularly concentrated long-biased strategies (namely activists) and credit strategies (namely distressed), posted the largest average losses in March. Managed futures, market neutral equity and even quantitative directional equity strategies performed relatively well.

Managed futures strategies (not all, but in aggregate) have gone through a prolonged difficult stretch since 2016, but this year has been a different story. Often having a goal of producing returns with low correlations to global markets and able to fair well in difficult times, this year many managed futures funds are doing just that.

The universe of funds was the only primary strategy with positive average returns in March and had by far the best proportion of products able to produce gains, with 53% of managers positive in March. Additionally, some of the largest funds in the space have produced very good results.

Macro funds produced a very wide range of results in March, even among the largest managers illustrating the variety of thematic approaches.

"Too often we see a strategy's returns as being indicative of what to expect from any given fund, but over the course of March we saw just how wrong that assumption can be," Peter said.

While returns from the largest macro managers averaged -3.78%, within that group of large funds there were gains and losses that were two or three times larger.

There were highlights and lowlights to be found in virtually every segment of the industry in March. It is now more important than ever to think of the industry not as a whole, but as a vast group of individuals with discretion, and programs and algorithms with differing and evolving rules. In a group of individuals operating in a pool of markets, some will navigate successfully, and some will not.

Article source - Opalesque is not responsible for the content of external internet sites

What do you think?

   Use "anonymous" as my name    |   Alert me via email on new comments   |   
Today's Exclusives Today's Other Voices More Exclusives
Previous Opalesque Exclusives                                  
More Other Voices
Previous Other Voices                                               
Access Alternative Market Briefing

 



  • Top Forwarded
  • Top Tracked
  • Top Searched
  1. SPACs: Mobile commerce platform Rezolve to go public via $2bn SPAC deal, Malaysia's securities regulator cuts minimum fundraising for SPAC IPOs, raises price, Travel technology firm Mondee nears $1bn SPAC deal to go public, Italy's Zegna to start trading on NYSE from Dec. 20 after SPAC merger, New SPAC raises $230m to target real estate or mortgage fintech[more]

    Mobile commerce platform Rezolve to go public via $2bn SPAC deal From Reuters: Mobile commerce platform Rezolve said on Friday it will list in New York through a merger with a blank-check firm backed by billionaire Betsy Cohen, in a deal valuing the combined company at about $2 billion

  2. Tech: AI argues for and against itself in Oxford Union debate, 15% of Dutch pension funds fall victim to cyber crime, The fight to control the metaverse: Crypto die-hards prepare for battle with Facebook and Big Tech[more]

    AI argues for and against itself in Oxford Union debate From BBC: The Oxford Union has heard from many great debaters over the years, but this week added an artificial intelligence engine to its distinguished speakers. The AI argued that the only way to stop such tech becoming to

  3. PE/VC: SOKA-BAU to raise private markets allocation with first move in private debt, Biotech deals tumble to lowest in a decade over regulatory fears[more]

    SOKA-BAU to raise private markets allocation with first move in private debt From IPE: SOKA-BAU, the German umbrella organisation of the two pension funds for the employees in the construction industry ULAK and ZVK, is targeting an allocation to private markets of 15%, up from the curr

  4. New Launches: Goldman collects $5bn for Petershill IV, OSF Ventures launches third and largest venture capital fund, London growth investor Sprints Capital raises $602m for new technology fund, BlackRock launches two new active Climate Action funds, Edtech-focused Owl Ventures raises over $1bn across three funds[more]

    Goldman collects $5bn for Petershill IV From PE News: Goldman Sachs Asset Management has made a final close of its Petershill IV fund, the fourth vintage of its GP stakes growth-focused private equity funds. The firm said the fund had been oversubscribed with commitments mostly c

  5. PE/VC: A record year in private equity drives competition for lucrative industries, The power law - how venture capital ate the stock market, Europe's unicorn herd multiplies as VC investment more than doubled in 2021, Platform private equity deals could be 'fraught with risk'[more]

    A record year in private equity drives competition for lucrative industries From Institutional Investor: With more private equity capital available than ever before, valuations are high - and competition is even higher. According to PitchBook's 2021 annual PE breakdown report, which wa