EM Hedge Funds Manage Record $151B

May 22 2013 | 10:57am ET

Emerging markets hedge funds attracted $1.8 billion in new capital in Q1 2013, bringing the total invested in such funds to a record $151 billion.

The Q1 totals follow strong Q4 2012 inflows, which saw an additional $3 billion allocated to EM funds, according to the latest data from Hedge Fund Research.

The HFRX Multi-Emerging Markets Index gained 5.9% through April, with strong performance from emerging Asia hedge funds—Chinese funds up 8.8%, Korean funds up 10.0% and Asia ex-Japan funds up 8.1%.

Russian/Eastern European funds gained 0.8% through April, Latin American funds added 2.2% and MENA -focused hedge funds were up 6.0%.

“Emerging market hedge funds have and continue to navigate a highly complex macro environment, with both direct and second order effects of the developed market stimulus impacting external capital flows and trade balances, with these driving EM currencies, commodity demand shifts and inflation targets,” stated Kenneth J. Heinz, president of HFR. “Hedge funds concentrated in emerging markets have benefited from these opportunities through sophisticated non-directional, arbitrage, volatility-oriented and hedged positioning, focusing on the fluid and interconnected nature of both the underlying assets, as well as the pan-EM nature of these opportunities.”

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