Hedge funds playing in share markets still control more assets than any other strategy in their industry, but after the sector led their peers' falls last year, allocators have very different levels of appetite for the various sub-strategies within ‘equity...
The Lyxor Global Hedge Fund index was up 1.3% in January, reversing its downwards trend in 2011 thanks to special situations, equity long bias and convertible bond strategies.
Interaction between the fund management industry and academics from around the world has been enhanced by Lyxor Asset Management’s Research conference, which draws out the best contemporary studies on hedge funds.
Hedge funds are expected to take net inflows of $80bn this year despite recording their second worst year of performance in two decades in 2011, as they faced some of the most difficult markets to navigate in a generation.
Market uncertainty and heightened fear among investors sent volatility hedge funds to near the top of the returns table for the alternatives industry last month, as they rose 2.5%.
Hedge funds are now down a modest 1.2% for this year after a 2.3% loss in last month's turbulent markets, concentrated among equities and event-driven strategies, eliminated hard-won gains up to July.
Scepticism some European allocators feel about the ability of ‘absolute return’ funds to achieve their aims has been vindicated so far this month as almost eight in every 10 European funds in the sector lost money in the volatile first three weeks.
Continuing investor appetite for emerging markets helped hedge funds focused on them hit new high assets of $123bn last quarter, after four consecutive quarters of net inflows.