Investors Flood Emerging Markets

Feb 11 2008 | 12:35pm ET

Investors are chasing performance all around the world, pouring $9 billion into emerging markets hedge funds.

The number of hedge funds dedicated to emerging markets rose to more than 950 last year, according to Hedge Fund Research, especially in funds focused on South America, the Middle East and Africa. Russia, Eastern European and emerging Asia also saw continued growth.

The strategy now manages some $110 billion.

The growth—a relative drop in the bucket at under 5% of new hedge fund assets, as the now-$1.87 trillion hedge fund industry added $194 billion last year—is not a surprise, given emerging markets funds’ success in recent years. The strategy was far-and-away the best performer in 2007, returning more than 25% while the average hedge fund added less than 11%. It has also been the best-performing hedge fund strategy in four of the past five years, according to HFR, though it suffered alongside other strategies last month, losing more than 5%.

“The success of emerging markets hedge funds—combined with the recent activity of sovereign wealth funds—is beginning to have a noticeable impact on global capital markets,” Kenneth Heinz, president of HFR, said. “Both have acted as liquidity providers to private corporations looking to strengthen balance sheets in recent months, a trend we expect to continue in 2008.”


In Depth

Q&A: High Conviction, Low Correlation

Oct 30 2014 | 7:35am ET

Acadian Asset Management's numbers are big: over $70 billion in assets under management...

Lifestyle

Ex-Hedgie Steyer Gives $56M To Climate Action Super PAC

Oct 28 2014 | 9:23am ET

Retired Farallon Capital founder Tom Steyer has poured almost $56 million into his...

Guest Contributor

Hedge Funds Weather A Data Management Perfect Storm

Oct 22 2014 | 12:28pm ET

From a regulatory standpoint, nearly every development since the crisis has placed...

 

Videos

Editor's Note

    Guidelines for Guest Articles

    Oct 22 2014 | 9:46am ET

    We are always looking for guest articles from hedge fund managers and buy-side firms.

    If you are interested in submitting a contributed piece for possible publication on FINalternatives, please take a look at the specs. Read more…

 

Futures Magazine

October 2014 Cover

The yield curve and stock market response

Traders form habits quickly. Understanding these and their effects can better equip us to decipher actual market moves.

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.