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Overview of 2010 Key Trends in Latin American Hedge Funds

Introduction

2010 has seen the Latin American hedge fund industry emerge as one of the most dynamic sectors in the global hedge fund space. While performance and growth in most other hedge fund regions remained slow or registered marginal declines, Latin American hedge funds continued to provide consistent returns to their investors. The average Latin American manager has seen only two instances of marginally negative returns in the last 23 months. Figure 1a tracks the industry assets since January 2009.

Figure 1a: Growth in Assets since January 2009

The Eurekahedge Latin American Hedge Fund Index remained the best performing broad-region hedge fund index through most of this year, with its year-to-date August return standing at 3.97%. Furthermore, the net assets under management in regional hedge funds have grown to reach US$55.4 billion as at end-August 2010. This translates into a 41% increase in net assets in 18 months.

Figure 1b shows the growth in the Latin American hedge fund industry through the last decade. While the total number of funds in the region has grown nearly four times since 2000, the assets under management have increased by more than 20 times over the same period.

Figure 1b: Industry Growth over the Years

The growth in industry assets picked up incrementally after 2003, registering a three-fold increase from 2004 to 2007. This tremendous growth is underscored...

 

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