Mon, Jan 24, 2022
A A A
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Industry Updates

HFM Event-driven Composite Index up 11.9% YTD through May after 1.6% monthly gain

Monday, June 28, 2021
Opalesque Industry Update - Event-driven funds gained 1.6% in May, making their YTD return through May the largest among HFM's top-level hedge fund indices (11.9%). This came on the back of intense M&A activity in H1, high-profile activist campaigns and innovation within existing strategies.

Record levels of M&A activity in the first five months of 2021, including several large deals, like WarnerMedia's merger with Discovery, presented event-driven hedge fund managers with multifarious opportunities to employ arbitrage strategies.

This month HFM reported that $750m Samson Rock Capital had taken advantage of the environment for event-driven managers to launch a new special situations business, led by industry veteran, Rado Bradistilov. Meanwhile, Dallas-based Saltoro Capital, which has returned 92% over 12 months, hired UBS Securities' global head of hedge fund sales with a view to securing entry into the hedge fund billion-dollar club.

All this marks a contrast to H1 2020 when event-driven funds fared considerably worse than other hedge fund strategies during the onset of Covid-19. Following significant net outflows in 2020, event-driven has built on strong performance towards the end of last year by becoming the top-performing strategy of 2021 YTD. Early signs are that this has sparked investor interest, which will continue into H2.

The average macro fund reporting to HFM gained 1.6% in May, taking the HFM Macro Index's YTD return to 5.3%, trailing the HFM Global Composite YTD by over three percentage points (8.8%). Having been wary of macro funds for much of the past 18 months, pulling more than $20bn from the strategy in 2020, investors have seen enough from recent performance numbers and economic indicators to increase and/or create macro exposure.

Investor flows added $3.7bn to macro assets in May, turning YTD flows positive for the first time since January, and look set to remain positive over the coming months. Provisional data from HFM's latest biannual investor sentiment survey suggests a third of hedge fund allocators are looking to increase their exposure to macro funds in H2 2021 - more than for any other top-level hedge fund strategy.

Experienced managers will hope to benefit from increased allocations as investors look to navigate the threat of inflation in the US, a slow economic recovery and the prospect of global price dislocations. Moreover, the likelihood of increased interest rates in the medium term and rapidly rising equity and commodity prices will facilitate greater volatility and potential returns for macro funds during the next 18 months.

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