Fixed-Income Most Popular UCITS Strategy

Jan 30 2013 | 9:20am ET

Fixed-income was the most popular UCITS hedge fund strategy in 2012, according to Alix Capital.

The firm's latest quarterly European research shows fixed-income funds attracted 56% (€13.2 billion) of all inflows into the UCITS hedge funds last year—including €4.7 billion in Q4 alone.

Macro strategies ranked a distant second, attracting 24.7% (€5.8 billion) of total UCITS inflows in 2012.

Overall, UCITS hedge funds saw their assets under management rise 20% in 2012 to a new-high of €140 billion.
Emerging markets were the best-performing UCITS strategies last year, returning 5.38%, followed by long/short equity, returning 4.88%. Commodities funds were the worst performers, down 5.44% in 2012.

The three largest single-strategy managers by AUM were Standard Life Investments, with €17.4 billion (up 59.8% on the year); GAM, with €12.5 billion (up 41.2%); and M&G’s with €10.8 billion, double its 2011 total.

Three funds returned more than 30% in 2012, 22 returned more than 20% and 84 achieved a performance above 10%.

Said Louis Zanolin, CEO of Alix Capital, in a statement: “Despite the current economic environment, the total assets managed in UCITS hedge funds continued to grow at a stronger rate than the rest of the hedge funds universe.

In 2012 the five largest fixed-income funds attracted 55% of total inflows into the UCITS hedge funds sector across all strategies, and 90% of the inflows into fixed-income strategies. This can be attributed to performance—some of these large funds achieved the best results in 2012, for example M&G Optimal Income—but also to investors’ preference for blue chip names, especially true for new investors coming from the long only space.”

Despite a bad year in terms of performance for funds of hedge funds in general, some witnessed strong growth. Credit Suisse Asset Management attracted €258 million in new inflows for its two funds bringing its AUM to €606 million, up 74.0% on the year.

UCITS hedge funds platforms offered 100 single-manager funds managing a total of €9.6 billion last year. Deutsche Bank DB Platinum was the largest platform in terms of AUM with €2.01 billion or 21.2% of the market.

Luxembourg, France and Ireland are the most popular domiciles for UCITS hedge funds with 46.1%, 18.1% and 16.7% market share respectively.

Alix reviewed the performance of 802 single-manager alternative UCITS funds and 80 alternative UCITS funds of funds as well as UCITS hedge fund platforms analysis.


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