Thursday, 31 July 2014
Last updated 2 hours ago
Oct 17 2013 | 1:46pm ET
Hedge funds gained 3.24% in Q3 2013 and are up 7.17% year to date, according to the latest data from Preqin research.
The September gains are very similar to the 7.37% gains of September 2012, and Preqin believes the industry is on track to similar full-year results.
Investor sentiment towards hedge fund performance has improved over the past 12 months, according to the data provider—the proportion of investors stating that hedge fund returns have fallen short of expectations has dropped from 41% in H2 2012 to 26% as of H2 2013.
Strategy-wise, CTAs continued to struggle in Q3, down 1.63% on the quarter and 2.46% YTD Moreover, CTAs represented only 4% of Q3 hedge fund launches, down from 8% in Q2.
Despite continued uncertainty over the Alternative Investment Fund Managers Directive, 23% of all hedge funds launched in Q3 2013 are managed by Europe-based firms, up from 12% and 19% of new launches in Q1 and Q2 respectively.
It's a different story for UCITS funds, however, which represented 4% of all launches in Q3, down from 9% in Q2.
Event-driven funds were the best performers in the third quarter, returning 4.01% (10.85% YTD). Meanwhile, 55% of investor searches issued in Q3 2013 contained a long/short component compared to 47% in Q2.
“This quarter has been one of mixed fortunes for the hedge fund industry; however, despite returns in most hedge fund strategies being in the red for August, both July and September were strong months for hedge fund performance, bringing the overall hedge fund benchmark for 2013 to date to 7.17%,” said Preqin's Amy Bensted in a statement. “However, performance is seen as both the key issue in the industry and a key factor assessed by institutional investors when looking at hedge funds in H2 2013.
“Funds that have performed particularly well in 2013, notably event driven strategies, are increasingly being sought by investors, whereas those that have been underperforming, such as CTAs, are losing investor interest. If Q4 can continue in the same vein as Q3, we would expect investors to continue to exhibit increased satisfaction and confidence with the performance of hedge funds as a whole; this could lead to further growth in the industry as more assets flow into these funds.”
Jul 8 2014 | 10:48am ET
The surge in derivatives regulation is among the most complex challenges facing the financial services industry today. Northern Trust’s Joshua Satten recently spoke with FINalternatives to share insights into the challenges presented by new regulation and explore how the industry is responding. Read more…