The February 2015 Eurekahedge Report contains qualitative and quantitative analyses on the industry's assets flows and performance over the past month, with a special feature on key trends in Islamic funds.
Hedge funds were off to a strong start in 2015, with the Eurekahedge Hedge Fund Index gaining 1.29%, outperforming underlying markets as the MSCI World Index fell 0.41% over concerns about a lack of global demand and Greece’s debt problems. This atmosphere of uncertainty and central bank activity contributed to heightened market volatility, which picked up in the first trading month of the year. US equities witnessed their largest loss since January 2014, underperforming global markets significantly as concerns over the strong US dollar and declining growth overseas weighed in on regional markets despite the strong economic picture in the US.
Hedge funds started 2015 on a good note, gaining 1.29% and outperforming underlying markets as the MSCI World Index slipped 0.41%. Global equity markets displayed mixed performance in January as the economic picture remained weak with fears mounting about a lack of global demand and high sovereign debt burdens. Volatility also rose as central bank actions dominated the markets during the month, with the CBOE VIX Index rising from 19.2 to 20.97 amid this atmosphere of uncertainty.
Islamic finance plays a key role in the global economy, covering the financial needs of the currently underserved Muslim population. With Muslims forming a quarter of the world’s population, this is potentially a very large market, yet less than 1% of financial assets are Shariah-compliant. Indeed, there appears to be a clear supply imbalance and the Islamic fund industry has been growing steadily over the years to accommodate this demand. While it does not seem likely to have reached a peak, the industry is projected to grow significantly larger driven by a younger generation of Muslims who are more open towards investing in financial assets, and also by wider increases in productivity and prosperity.
Shareholder activism has increased significantly over the past several years, and many companies who once believed they were too small to attract the attention of activist shareholders more and more frequently find themselves in the middle of a proxy contest or responding to shareholder proposals, among other things.
Though relatively underdeveloped compared to some other Western jurisdictions, namely the UK and the
US, Islamic finance is making small but steady strides in the Canadian market. Rehan Huda discusses the
correlation between the growth in size and affluence of the Canadian Muslim community and growth in the level of observance, leading to more vocal demand for Islamic fi nancial products and services.
Week two of the new year marked a significant step in the development of the European Private Placement Market. The Loan Market Association (LMA) launched template documents for use in European private placement transactions. The development of standardised documentation will improve the visibility and perception of the product and might provide the European private placement market with the potential to grow, in time, into a notable competitor to the US market.
Held at Capella Singapore for its 11th incarnation on 23 May 2014, the Eurekahedge Asian Hedge Fund Awards 2014 was graced by 300 hedge fund players commemorating the region’s 76 top performing Asian hedge funds for 2013. A total of 14 awards were presented on the night. Through a silent auction of three paintings, and a live auction of one painting, Eurekahedge raised a total of SGD$30,000 for Children of Cambodia; a Singapore-based charity association to receive the proceeds - to support Children of Cambodia’s partner, the Angkor Hospital for Children. The Eurekahedge Asian Hedge Fund Awards 2015 will be returning on 22 May 2015 to Capella Singapore and we hope you are looking forward to what this year has in store.
The January 2015 Eurekahedge Report contains qualitative and quantitative analyses on the industry's assets flows and performance over the past month, with a special feature on key trends in global hedge funds.
Hedge funds finished 2014 up 4.46%, with the Eurekahedge Hedge Fund Index gaining another 0.14%, outperforming underlying markets as the MSCI World Index fell 0.80% in December after equities retreated from their intra-month heights. Further steep falls in oil prices and fears of a global slowdown contributed to an atmosphere of uncertainty, which caused volatility to pick up in the final trading month of the year as the market traded in a choppy sideways manner.
Hedge funds rounded up the final month of 2014 in positive territory, up 0.14%, outperforming underlying markets as the MSCI World Index lost 0.80%. Global equity markets largely traded sideways to end December in negative territory, fuelled by further steep falls in oil prices and fears of a global slowdown. Volatility also picked up in the final trading month of the year amid the atmosphere of uncertainty - reflected in the CBOE VIX Index which rose 44.04% to 19.2 during the month of December. Most of the salient macroeconomic themes from November maintained their relevance going into December; mainly the fall in oil prices and the impact of divergent central bank policies.
Global hedge funds have maintained a steady pace of growth building upon the strong gains seen in 2013, with new investor allocation activity totalling US$40.8 billion in the first eleven months of 2014. Combined with excellent performance-based gains of US$76.5 billion delivered by hedge fund managers, this puts the current assets under management (AUM) of the industry at US$2.13 trillion – another new high.
India focused hedge funds have posted spectacular returns in 2014 against the backdrop of rising domestic equity markets, and a renewed sense of confidence in the Indian economy which is being led by Narendra Modi. Hedge funds investing with an Indian mandate have topped the performance tables in 2014 and in this special section of The Eurekahedge Report, we ask some of the top performing Indian hedge fund managers about their winning themes during the year, in addition to investor allocation activity and the key macroeconomic themes which they will be watching out for in 2015.
Gen2 Partners (Gen2) is one of the leaders in customised Asian Hedge Funds for Institutional Investors and Family Offices, in addition to being a trusted partner to help manage investors’ exposure to Asia across all Asian alternative strategies.
Switzerland has always been an attractive and relatively easily accessible market for the distribution of foreign funds. As at end-November 2014, the total volume of funds registered for sale to retail investors (including institutional share classes) amounted to more than CHF 850 billion. This is not the total market picture, however, as according to the Swiss National Bank, at the end of 2014 another approximately CHF 800 billion have been privately placed into securities accounts of Swiss and foreign private HNWI'’s and institutional clients held with banks in Switzerland.
Enormous, diverse, rich in resources but historically underserved and overlooked by the financial services sector, Africa has a Muslim population of over 400 million. A nascent Islamic finance industry is gradually emerging across the continent, invigorated by the strengthening of economic links and increased trade between Africa and the rest of the world. – with the Middle East especially playing an important role in bringing vital investment into rapidly developing countries. Patrick Colegrave and Joanna Hossack look at the current climate for the industry, and how this can continue and increase in the coming years.
Last year at about this time in December, we were still working our way through the final Volcker Rule. A year has passed and we are still attempting to understand the exceptions that may be available in connection with hedging of exposures arising in connection with the issuance of structured products. We anticipate that there will be additional regulatory guidance on the Volcker Rule. In fact, in their public statements, Federal Reserve representatives have alluded to possible changes relating to the metrics and compliance policy requirements.