Wednesday, 22 October 2014
Last updated 7 hours ago
Apr 19 2012 | 12:35pm ET
Investors flooded into hedge funds in the first quarter, sending industry assets back above pre-crisis levels.
The industry took in $16 billion in net inflows in the first three months of the year, according to Hedge Fund Research. Along with performance gains, that pushed total hedge fund assets up to $2.13 trillion.
The new total tops both the industry's pre-crisis asset level and the record of $2.04 trillion set at the middle of last year.
Relative value and macro strategies were most popular among investors, taking in $12.4 billion and $7.8 billion, respectively. Larger managers were also favored during the first quarter; those with more than $5 billion in assets saw net inflows of $18.3 billion.
Equity funds and smaller hedge funds did less well. The former suffered net redemptions of $2.9 billion. Hedge funds with less than $5 billion in assets lost $2 billion to redemptions. Event-driven funds were also losers, suffering net withdrawals of $940 million.
"Investors responded favorably to the risk-shifting which occurred across financial markets in the first quarter," HFR President Kenneth Heinz said. "Sophisticated institutional investors are increasingly allocating to hedge funds as a powerful strategic portfolio complement to existing traditional holdings."
Sep 22 2014 | 4:15pm ET
"I tell people that everybody likes good news and so if you have good performance that’s wonderful,” explains Mike McKitish of Peddie School's endowment, “but it’s the people that want to talk about the bad news or where they drifted and how they came back and how they stayed to their discipline…” that he wants to hear from. Read more…
Most traders agree that proper risk management is the key to successful trading. However, many traders depend on the deeply flawed measure of standard deviation as a benchmark of risk. Here we put it ...