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The Eurekahedge Hedge Fund Index was up 2.06%1 in February as optimism about European debt and strengthening global economy fueled rallies in the underlying markets. The MSCI World Index gained 4.55%2 as high risk appetite continued for the second month running. All regions and strategies finished the month with positive returns while the asset-weighted Mizuho-Eurekahedge Index was also up 1.64% in February.
Key highlights for February 2012:
The Eurekahedge Hedge Fund Index is up 4.30% for the first two months of the year, meaning the industry is enjoying its strongest start to a year in 12 years.
Hedge funds saw US$20 billion in net positive asset flows during January and February 2012.
Long/short equity funds have gained 6.2% year-to-date as of the end of February.
The asset weighted Mizuho-Eurekahedge Asia ex-Japan Hedge Fund Index is up nearly 10% in 2012.
Eastern Europe & Russia investing hedge funds are on a strong run in 2012, with returns up an impressive 12.57%.
All regional mandates finished the month with positive returns with managers investing in Eastern Europe & Russia and Asia ex-Japan witnessing the largest gains. The Eurekahedge Eastern Europe & Russia Hedge Fund Index was up 6.10% in February, bringing its year-to-date (YTD) return to a substantial 12.57%. In addition to the overall positive global economic view, the underlying markets have benefitted from constructive moves by regional governments while managers investing in the region also gained from the sharp gains in the local currencies against the greenback.
Asia ex-Japan hedge funds delivered a 4.40% return for the month, bringing their February YTD figure to 8.84%. The regional managers have profited from a strong performance in the consumer and industrial sectors while also profiting from strengthening local currency exposures. The asset-weighted Mizuho-Eurekahedge Asia ex-Japan Index is up 9.55% February YTD, showing that larger funds have outperformed over the last two months.
Notable among other regions is the performance of European hedge funds, the Eurekahedge European Hedge Fund Index was up 5.14% February YTD as heightened risk appetite and improving sentiment about the European debt situation led to healthy performance in the underlying markets. Additionally, early reports indicate that European hedge funds have also started to attract capital from investors, implying that confidence in the region is returning.
Strategy Indices
Hedge funds with exposure to equities raked in the largest gains in February with long/short equity managers gaining 2.92%, event driven hedge funds up 2.44% and multi-strategy managers posting returns of 2.21% for the month. Sustained rallies in the equity markets (driven by strong corporate earnings and improving US economic indicators) provided equity managers with a healthy profit-making environment. The S&P 500 gained 4.06%, bringing its YTD return to 8.59% - the best first two months of the year since 1991. Long/short equity mangers captured most of the gains on offer during January and February, with their YTD return standing at 6.17%. Event driven managers benefitted from investing in companies with strong balance sheets, which had a number of low-value opportunities to gain from. All other strategies also posted healthy returns for the month and remain in the black February YTD.
Eurekahedge indices are available for download from www.eurekahedge.com/indices/hedgefundindices.asp and are updated with the latest fund returns at 23:30 GMT every day.
Saturday, March 10, 2012
Wednesday, March 7, 2012
The Dow Jones Credit Suisse Core Hedge Fund Index Closed Up 1.31% in February
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The Dow Jones Credit Suisse Core Hedge Fund Index closed up 1.31% in February as all of the index component strategies reported positive results for February.
The Dow Jones Credit Suisse Core Hedge Fund Index provides daily published index values which enable investors to seek to track the impact of market events on the hedge fund industry. February, January and year-to-date 2012 performances are listed below and are available at www.hedgeindex.com.
The numbers below each index are as follows:
Feb-12
Jan-12
YTD 2012
Dow Jones Credit Suisse Core Hedge Fund Index
1.31%
2.26%
3.60%
Convertible Arbitrage
2.34%
3.47%
5.89%
Emerging Markets
1.83%
1.80%
3.66%
Event Driven
1.47%
2.90%
4.41%
Fixed Income Arbitrage
0.43%
0.93%
1.36%
Global Macro
0.93%
1.96%
2.90%
Long/Short Equity
2.05%
3.21%
5.32%
Managed Futures
0.69%
0.95%
1.65%
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The Dow Jones Credit Suisse Core Hedge Fund Index closed up 1.31% in February as all of the index component strategies reported positive results for February.
The Dow Jones Credit Suisse Core Hedge Fund Index provides daily published index values which enable investors to seek to track the impact of market events on the hedge fund industry. February, January and year-to-date 2012 performances are listed below and are available at www.hedgeindex.com.
The numbers below each index are as follows:
Feb-12
Jan-12
YTD 2012
Dow Jones Credit Suisse Core Hedge Fund Index
1.31%
2.26%
3.60%
Convertible Arbitrage
2.34%
3.47%
5.89%
Emerging Markets
1.83%
1.80%
3.66%
Event Driven
1.47%
2.90%
4.41%
Fixed Income Arbitrage
0.43%
0.93%
1.36%
Global Macro
0.93%
1.96%
2.90%
Long/Short Equity
2.05%
3.21%
5.32%
Managed Futures
0.69%
0.95%
1.65%
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Dow Jones Credit Suisse Offers Insight Into January Hedge Fund Performance
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The Dow Jones Credit Suisse Hedge Fund Index finished up 2.34% in January. A new monthly commentary offers insight into hedge fund performance through the month of January. Some key findings from the report include:
Hedge funds, as measured by the Dow Jones Credit Suisse Hedge Fund Index, finished January up 2.34%; with 9 out of 10 strategies in positive territory;
In total, the industry saw estimated outflows of approximately $15 billion in January, bringing overall assets under management for the industry to approximately $1.72 trillion;
The Equity Market Neutral and Convertible Arbitrage sectors experienced the largest asset inflows on a percentage basis in January, with inflows of 2.27% and 0.87% from December 2011 levels, respectively;
Directional strategies, such as Long/Short Equity, experienced positive performance driven by a risky asset rally. Mean reversion was a notable trend as sectors that performed poorly for the year in 2011 performed well in January;
Tactical trading managers showed generally positive performance. Global Macro managers and Managed Futures funds posted gains as managers benefitted from macroeconomic shifts; and
On the relative value front, managers showed positive performance in January. Fixed Income Arbitrage managers posted gains despite the swift change from a risk-off to a risk-on market.
Click here to view the full report which includes an overview of January hedge fund performance, in-depth commentary on individual hedge fund sectors and hedge fund return dispersion statistics for each strategy.
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The Dow Jones Credit Suisse Hedge Fund Index finished up 2.34% in January. A new monthly commentary offers insight into hedge fund performance through the month of January. Some key findings from the report include:
Hedge funds, as measured by the Dow Jones Credit Suisse Hedge Fund Index, finished January up 2.34%; with 9 out of 10 strategies in positive territory;
In total, the industry saw estimated outflows of approximately $15 billion in January, bringing overall assets under management for the industry to approximately $1.72 trillion;
The Equity Market Neutral and Convertible Arbitrage sectors experienced the largest asset inflows on a percentage basis in January, with inflows of 2.27% and 0.87% from December 2011 levels, respectively;
Directional strategies, such as Long/Short Equity, experienced positive performance driven by a risky asset rally. Mean reversion was a notable trend as sectors that performed poorly for the year in 2011 performed well in January;
Tactical trading managers showed generally positive performance. Global Macro managers and Managed Futures funds posted gains as managers benefitted from macroeconomic shifts; and
On the relative value front, managers showed positive performance in January. Fixed Income Arbitrage managers posted gains despite the swift change from a risk-off to a risk-on market.
Click here to view the full report which includes an overview of January hedge fund performance, in-depth commentary on individual hedge fund sectors and hedge fund return dispersion statistics for each strategy.
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Emerging Markets Index leads hedge fund industry with +4.4 percent gain in January
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Funds investing in Russia, Latin America post top gains as EM hedge fund assets rise
Emerging Markets hedge funds led broad-based performance gains across the global hedge fund industry to start 2012, with the HFRI Emerging Markets (Total) Index gaining +4.4 percent for the month of January, as reported by HFR with the most recent release of the Emerging Markets Hedge Fund Industry Report and Database. Prior to January gains, Emerging Market hedge funds concluded a challenging year in 2011, posting an average decline of -13.8 percent, the 3rd worst calendar year since 1990.
Details: HFR Emerging Markets Hedge Fund Industry Report: Year End 2011
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Funds investing in Russia, Latin America post top gains as EM hedge fund assets rise
Emerging Markets hedge funds led broad-based performance gains across the global hedge fund industry to start 2012, with the HFRI Emerging Markets (Total) Index gaining +4.4 percent for the month of January, as reported by HFR with the most recent release of the Emerging Markets Hedge Fund Industry Report and Database. Prior to January gains, Emerging Market hedge funds concluded a challenging year in 2011, posting an average decline of -13.8 percent, the 3rd worst calendar year since 1990.
Details: HFR Emerging Markets Hedge Fund Industry Report: Year End 2011
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Hedge Funds Redeem $15.2 Billion in January, Highest Outflow Since July 2009
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Hedge Fund Managers Bullish on S&P 500 in February, According to BarclayHedge/TrimTabs Survey; Plurality of Fund Managers See Equities as Best Investment for Next Three Months
BarclayHedge and TrimTabs Investment Research reported today that hedge funds redeemed an estimated $15.2 billion (0.9% of assets) in January 2012 while underperforming the S&P 500 by 110 basis points for the month. Industry assets rose to $1.70 trillion in January from $1.68 trillion in December 2011.
“Hedge funds managed a 3.1% return in January after posting losses in seven out of the last eight months of 2011,” said Sol Waksman, founder and President of BarclayHedge. The benchmark S&P 500 Index returned 4.2% in January after outperforming the hedge fund industry for all of 2011.
“January marked the biggest monthly outflow since July 2009, when hedge funds redeemed $17.7 billion,” said Leon Mirochnik, an analyst at TrimTabs. “The hedge fund industry has experienced net outflows in four out of the last five months.” Fixed Income, Multi-Strategy, and Merger Arbitrage hedge funds are the only investing strategies that have seen net inflows since September 2011.
Funds of hedge funds underperformed their hedge fund counterparts by 140 bps, returning 1.7% in January. “It seems funds-of-funds managers might have a hard time explaining their layers of fees to their clients, as funds-of-funds have underperformed hedge funds by 200 bps over the past year,” Mirochnik said.
“Multi-Strategy hedge funds pulled in $2.6 billion (1.1% of assets) in January, the heaviest inflow of the strategies we track,” Mirochnik said. “Investors seem to be piling into strategies that can benefit from geopolitical uncertainty around the world.”
Meanwhile, the latest TrimTabs/BarclayHedge Survey of Hedge Fund Managers reveals hedge fund managers remain bullish on the prospects of U.S. equities. The survey of 105 hedge fund managers found bullish sentiment on the S&P 500 at 40.0% in February 2012, down from 45.4% in January. Bearish sentiment rose to 30.5% in February from 25.0% in January. Managers were surveyed in the third week of February.
The survey also found that nearly 30.0% of managers believed that U.S. equities would be the top-performing investment over the next three months. Gold came in second at nearly 23.0% and oil received 20.0% of the vote.
Hedge Fund Managers Bullish on S&P 500 in February, According to BarclayHedge/TrimTabs Survey; Plurality of Fund Managers See Equities as Best Investment for Next Three Months
BarclayHedge and TrimTabs Investment Research reported today that hedge funds redeemed an estimated $15.2 billion (0.9% of assets) in January 2012 while underperforming the S&P 500 by 110 basis points for the month. Industry assets rose to $1.70 trillion in January from $1.68 trillion in December 2011.
“Hedge funds managed a 3.1% return in January after posting losses in seven out of the last eight months of 2011,” said Sol Waksman, founder and President of BarclayHedge. The benchmark S&P 500 Index returned 4.2% in January after outperforming the hedge fund industry for all of 2011.
“January marked the biggest monthly outflow since July 2009, when hedge funds redeemed $17.7 billion,” said Leon Mirochnik, an analyst at TrimTabs. “The hedge fund industry has experienced net outflows in four out of the last five months.” Fixed Income, Multi-Strategy, and Merger Arbitrage hedge funds are the only investing strategies that have seen net inflows since September 2011.
Funds of hedge funds underperformed their hedge fund counterparts by 140 bps, returning 1.7% in January. “It seems funds-of-funds managers might have a hard time explaining their layers of fees to their clients, as funds-of-funds have underperformed hedge funds by 200 bps over the past year,” Mirochnik said.
“Multi-Strategy hedge funds pulled in $2.6 billion (1.1% of assets) in January, the heaviest inflow of the strategies we track,” Mirochnik said. “Investors seem to be piling into strategies that can benefit from geopolitical uncertainty around the world.”
Meanwhile, the latest TrimTabs/BarclayHedge Survey of Hedge Fund Managers reveals hedge fund managers remain bullish on the prospects of U.S. equities. The survey of 105 hedge fund managers found bullish sentiment on the S&P 500 at 40.0% in February 2012, down from 45.4% in January. Bearish sentiment rose to 30.5% in February from 25.0% in January. Managers were surveyed in the third week of February.
The survey also found that nearly 30.0% of managers believed that U.S. equities would be the top-performing investment over the next three months. Gold came in second at nearly 23.0% and oil received 20.0% of the vote.
Thursday, March 1, 2012
Newly started hedge funds received $12.4 billion in deposits from 2009 through 2011
Newly started hedge funds received $12.4 billion in deposits from 2009 through 2011 from investors that believe many managers perform best during their early years, according to a Citigroup Inc. (C) report. Citigroup surveyed 90 global investors with $368 billion in assets, including funds of funds, family offices, private banks and endowments.
Investors allocated $5.6 billion to 352 start-up hedge funds in 2011 and have made $12.4 billion in day-one and early-stage investments since 2009, according to the report by Citi Prime Finance.
Researchers at Citi identified 78 investors globally that made 779 investments in hedge funds with a track record of less than one year since 2009. The average day-one or early-stage investment was $16 million, compared with $37.7 million for established managers.
Funds of hedge funds (FoHFs) accounted for around 70% of day-one and early-stage investors, followed by private banks and family offices. Institutional investors such as pension funds typically have minimum track record and ticket size constraints which preclude them from investing in start-ups.
US-based investors accounted for 63% of the universe of day-one and early-stage allocators and committed nearly three times more capital to start-up hedge funds than European groups.
Despite an up-tick in early-stage investments in 2011 compared with previous years, raising capital remains a huge challenge for start-ups. Hedge fund managers interviewed by Citi said they had to meet with as many as 100 potential investors to secure two to four allocations.
They were also pressured by investors to provide fee discounts and other concessions in exchange for capital. The average manager settles for a 1.5% management fee and a 15% performance in exchange for start-up capital.
Even then, early-stage investors tend to gravitate to funds that already have significant capital behind them, either in the form of a seed investor or personal investments from principals.
Globally, the average size of managers receiving day-one or early-stage allocations was $193 million. In the US hedge funds receiving early-stage investments tend to have more than $200 million, while in Europe and Asia the average falls to less than $100 million.
Investors allocated $5.6 billion to 352 start-up hedge funds in 2011 and have made $12.4 billion in day-one and early-stage investments since 2009, according to the report by Citi Prime Finance.
Researchers at Citi identified 78 investors globally that made 779 investments in hedge funds with a track record of less than one year since 2009. The average day-one or early-stage investment was $16 million, compared with $37.7 million for established managers.
Funds of hedge funds (FoHFs) accounted for around 70% of day-one and early-stage investors, followed by private banks and family offices. Institutional investors such as pension funds typically have minimum track record and ticket size constraints which preclude them from investing in start-ups.
US-based investors accounted for 63% of the universe of day-one and early-stage allocators and committed nearly three times more capital to start-up hedge funds than European groups.
Despite an up-tick in early-stage investments in 2011 compared with previous years, raising capital remains a huge challenge for start-ups. Hedge fund managers interviewed by Citi said they had to meet with as many as 100 potential investors to secure two to four allocations.
They were also pressured by investors to provide fee discounts and other concessions in exchange for capital. The average manager settles for a 1.5% management fee and a 15% performance in exchange for start-up capital.
Even then, early-stage investors tend to gravitate to funds that already have significant capital behind them, either in the form of a seed investor or personal investments from principals.
Globally, the average size of managers receiving day-one or early-stage allocations was $193 million. In the US hedge funds receiving early-stage investments tend to have more than $200 million, while in Europe and Asia the average falls to less than $100 million.
“Understanding the Hedge Fund Maturity Model”
As the Alternatives industry prepares for increased capital flows, Investors and Regulators look increasingly at hedge funds' organizational and infrastructure maturity.
This “Hedge Fund Maturity Model“ whitepaper takes a best practices approach and lays out a framework and taxonomy for discussing hedge fund evolution. This work is based on detailed analysis and benchmarking of the different types of funds that exist in the new landscape. It attempts to highlight the key organizational, operational and technology transitions that take place at different stages of a firm's development and provides a template for understanding the inner workings of a manager as AUM grows and as the firm's scale of operations advances.
This “Hedge Fund Maturity Model“ whitepaper takes a best practices approach and lays out a framework and taxonomy for discussing hedge fund evolution. This work is based on detailed analysis and benchmarking of the different types of funds that exist in the new landscape. It attempts to highlight the key organizational, operational and technology transitions that take place at different stages of a firm's development and provides a template for understanding the inner workings of a manager as AUM grows and as the firm's scale of operations advances.
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