Long/Short Funds Lead Q1 Returns

Apr 25 2013 | 10:58am ET

Long/short strategies were the best-performing hedge funds in the first quarter of 2013, with cumulative net returns of 4.43%, according to the latest data from Preqin.

The strategy was also popular with institutional investors, 43% of whom planned to invest in long/short funds in the next 12 months.

Those investors will have some new long/short funds to choose from—58% of all hedge fund launches in Q1 2013 were long/short strategies.

Macro funds returned only 1.17% in the first quarter and accounted for only 14% of fund launches, down from 32% in the last quarter of 2012.

CTAs were the worst-performing hedge funds in Q1 with net returns of 0.21%; investor appetite for this strategy also fell, with CTAs representing 17% of investor searches compared to 25% in Q2 2012.

Event-driven strategies posted the highest rate of cumulative returns over the last 12 months, at 9.44%, and accounted for 11% of hedge funds launched in Q1. On the other hand, investor appetite for event-driven funds declined to 18% of searches from 27% in Q2 2012.

More than a quarter (28%) of fund launches in Q1 were first-time managers while the bulk (81%) were North-American base. European launches accounted for just 12% of the Q1 total.

Interest in UCITS-compliants funds was also up, with 14% of investor searches including a UCITS component compared to 7% in 2012.

Funds of hedge funds posted their highest net quarterly returns (3.16%) since Q1 2012. Single-manager hedge funds returned 3.35% in Q1 2013.

“Liquid strategies trading on equities, notably long/short equity, are increasingly being sought by institutional investors looking to take advantage of the current market rally,”  said Amy Bensted of Preqin in a statement. “As Preqin’s fund launch data demonstrates, long/short strategies represent well over half of known hedge fund launches in the first quarter of 2013; therefore investors targeting this strategy will have a wide choice of funds, both established and emerging, to fill these open mandates.”


In Depth

Will Liquid Alts’ Performance Sustain Future Asset Flows?

Aug 25 2014 | 10:34am ET

Liquid alternative investment funds saw the highest percentage of capital inflows...

Lifestyle

Och Funds Women In Finance Initiative At U-M

Aug 28 2014 | 3:01pm ET

Och-Ziff Capital founder Daniel Och and his wife have made a "generous donation"...

Guest Contributor

Looking Ahead: What’s In Store For Managed Futures?

Aug 22 2014 | 12:52pm ET

The last five years were phenomenal for investors in equity indices. Will the next...

 

Editor's Note

    Get A Sneak Peak Of The Alpha Pages

    Aug 25 2014 | 11:21am ET

    As many of you know, FINalternatives was recently acquired by the owners of Futures magazine, a firm called The Alpha Pages LLC. Today marks the soft-launch of a new sister site for both publications. As its name suggests, The Alpha Pages will cover all types of alternative investments, going far beyond the more well-known ones such as hedge funds and private equity. Read more…

 

Futures Magazine

July/August 2014 Cover

The time was right

Commodities/Futures magazine launched at the precipice of a revolution in the futures industry—really a revolution in the idea of risk management—that would move it from a small niche industry to ...

The Alpha Pages

TAP July/August 2014 Cover

The Alpha Pages Interview: Senator Rand Paul

Senator Paul sat down in the debut series of the Alpha Pages Interview to discuss the broken tax code, regulation surrounding Bitcoin, and his plans for the 2016 Presidential election.