Hedge Fund AUM: A summary of the performance and asset flow update from the January 2014 Eurekahedge Report.
Hedge fund AUM and performance
- Hedge fund AUM increased by almost 13% during the year to breach the US$2.0 trillion mark
- Hedge funds realized their best year of performance-based gains since 2010, raking in US$100 billion during the year, with long/short equities strategies accounting for almost half of this gain
- Net asset allocations to hedge funds stood at US$130 billion in 2013, with long/short equities managers witnessing net inflows of US$82.2 billion during the year
- European hedge fund managers were up 8.77% in 2013 with net asset inflows for the year standing at US$60.2 billion – the highest level on record
- North American long/short equities hedge funds ended the year with gains of 18.48%, with 20% of these hedge fund managers outperforming the S&P500 Index by an average of 20.52% during the year
- Asian hedge funds outperformed their global peers and were up 15.86% in 2013, with fund managers recording net asset inflows of US$11 billion during the year – the highest level on record since 2007
- Japanese hedge funds remained ahead of other regions, up 26.77% with pure Japan mandated funds recording net inflows of US$700 million since June 2013
- Greater China focused hedge funds were up 19.39% in 2013, outperforming the Hang Seng Index by more than 16%
- Distressed debt hedge funds have delivered the best returns among all strategies and were up 17.95% in 2013
Hedge Fund AUM and Performance update
Hedge funds delivered their fourth consecutive month of positive returns as global markets ended the year on a positive note. The Eurekahedge Hedge Fund Index was up 0.98% during the month while the MSCI World Index gained 1.67% in December.
Global markets digested the news of the much awaited QE tapering as the Fed reiterated its resolve to keep interest rates low in order to sustain a continued recovery in the US economy. While North American and European markets edged upwards on the news, emerging market fears over capital outflows resurfaced with the MSCI Emerging Markets Index declining 0.93% during the month. Asian markets were mixed during the month as tightening liquidity in mainland China coupled with a decline in the country’s PMI gauge dampened investor sentiment.
All major hedge fund investment regions witnessed positive returns during the month. The Eurekahedge Japan Hedge Fund Index saw the strongest gains among all regional mandates – up 2.13% in December. Japanese fund managers posted yet another month of positive returns as the Nikkei 225 Index climbed 4.02% during the month, helped by a fall in the value of the yen which depreciated 2.68% against the US dollar. North American managers were up 1.57%, (10.18% for the year) as equity markets rallied to new highs with the NASDAQ Composite (INDEXNASDAQ:.IXIC), S&P 500 (INDEXSP:.INX) and Dow Jones Industrial Average 2 Minute (INDEXDJX:.DJI) gaining 2.87%, 2.36% and 3.05% respectively during the month. European fund managers posted gains of 1.00%, ahead of the MSCI Europe Index which was up 0.88% during the month. Emerging markets focused funds were up 0.87%, with fund managers exposed to India posting gains of 2.97% and outperforming the BSE Sensex Index which was up 1.82% during the month.