The benchmark Eurekahedge Hedge Fund Index was up 1.06% in March, 4.36% year-to-date. Total assets under management increased by US$1.8 billion during the month as the sector witnessed a performance-based increase of US$9.8 billion while registering net asset outflows of US$8.0 billion. The total size of the industry now stands at US$2.31 trillion.
The Eurekahedge Hedge Fund Index was up 1.06% in March, wrapping the first quarter of the year gaining 4.36% year-to-date. Hedge fund managers narrowly trailed behind the global equity market as represented by the MSCI AC World Index which gained 1.09% in March. The global equity and bond markets have rallied through the first quarter of 2019, supported by the dovish stance exhibited by major central banks, as well as the optimism over the US-China trade negotiations. On the other hand, concerns over slowing economic growth have persisted through the quarter, with growth forecasts being cut. The majority of hedge fund managers tracked by Eurekahedge recorded positive returns in March, with those focusing on Asia ex-Japan countries posting strongest gains. Despite the positive performance exhibited by hedge fund managers, investor appetite remained muted as the industry saw net investor outflows throughout the month.
The Eurekahedge Hedge Fund Index gained 1.06% in March , resulting in the strongest post-crisis Q1 return of 4.36%. Hedge fund managers recorded three consecutive months of positive performance, supported by strength in the global equity and bond markets as central banks shy away from tight monetary policies. Optimism over the progress of the US-China trade talks helped bolster the equity markets around the globe, counterbalancing concerns over economic growth slowdown.
ANDA Cruise, FengHe Asia Fund, Golden Pine Fund, KS Asia Absolute Return Fund, Realm High Income Fund, and Segantii Asia Pacific Equity Multi-Strategy Fund outshine peers in 2018
The Asian hedge fund managers tracked by Eurekahedge ended 2018 down 8.71% on average, recording their worst yearly performance since the 2008 global financial crisis. In spite of a strong start in January, the return of market volatilities in February and the escalation of the trade tension between the United States and China pushed the majority of Asian hedge funds into the red for the year. Compared to their global peers, fund managers focusing on Asia suffered heavier blows from the equity market sell-offs in response to the US Federal Reserve’s aggressive rate hikes throughout the year.
The Eurekahedge Asian Hedge Fund Index was up 4.15% year-to-date as of February 2019, trailing behind the underlying equity market represented by the MSCI AC Asia Pacific IMI which gained 8.56% over the same period. Asian hedge funds recovered from the losses incurred in 2018 as a result of the escalation of the international trade conflict between the world’s two largest economies, and the aggressive Fed rate hikes which triggered equity sell-offs in October and December 2018. In 2019, the Trump administration delayed the scheduled tariff increase to Chinese imported goods, reflecting the progress of the trade talks between the US and China.
Eurekahedge’s Asian hedge funds infographic sums up the industry as at April 2019. Find out more about Asian hedge funds assets under management (AUM), asset flows into strategic and regional mandates, strategy returns, fund size and geographic AUM, head office locations and the best and worst performances of the year.
The Eurekahedge Hedge Fund Index was up 3.28% as of February 2019 year-to-date as the industry recovered from the losses suffered in 2018. Last year, hedge funds recorded their worst annual performance since the 2008 global financial crisis as the escalation of the US-China trade war, aggressive rate hikes from the US Federal Reserve, and concerns over slowing global growth weighed on global equities. Going into 2019, the risk sentiment had improved due to the progress of the US-China trade negotiations, which showed that both parties are serious in resolving the conflicts between their trade and industrial policies.
Eurekahedge’s global hedge funds infographic sums up the industry as at April 2019. Find out more about global hedge funds assets under management (AUM), asset flows into strategic and regional mandates, strategy returns, fund size and geographic AUM, head office locations and the best and worst performances of the year.
Key changes to the scope of EMIR which asset managers should be aware of as a result of EMIR REFIT are
-a broadening of the definition of a “financial counterparty” (FC), such that all non-EU funds will be categorised by EU dealers as third-country entity FCs (as opposed to third-country entity NFCs); and
-the introduction of an exemption from the clearing obligation for FCs below a certain threshold (FC-s).
Last year, the president signed FIRRMA into law, clarifying how CFIUS will treat investments made by private equity funds subject to future regulations, and simultaneously expanding CFIUS' jurisdiction to encompass non-controlling investments in "critical infrastructure" and "critical technology" companies, as well as companies that maintain or collect sensitive data of U.S. citizens (collectively "Sensitive U.S. Businesses"). This expanded jurisdiction will have a significant impact on foreign investors generally, as well as U.S. private equity funds with foreign general or limited partners.
On October 5, 2018, the president signed Public Law 115-254 into law – the Better Utilisation of Investments Leading to Development Act of 2018 (BUILD Act). The BUILD Act creates the United States International Development Finance Corporation (IDFC), a new wholly owned government corporation. It will replace the Overseas Private Investment Corporation (OPIC) and transfer, among other functions, the Development Credit Authority from the U.S. Agency for International Development (USAID) to the IDFC. It is subject to reauthorisation in seven years.
Just a few years ago, investment in women’s health was sparse. Global funding for the femtech sector had barely reached $100 million and there continued to be a glaring lack of research into critical areas such as female heart disease and gynecological disorders. That is finally changing, driven in large part by female funders who have identified the value in the sector and have started putting their money to work.
Eurekahedge, a market leading alternative fund data provider and research house is pleased to announce the launch of the Global Hedge Fund Awards - the first of its kind industry wide initiative to recognise and award hedge fund managers across the globe. Our elite panel of judges hailing from a mix of public and private pension funds as well as premier funds of hedge funds will pick winners across Americas, Europe & Middle East Africa and Asia Pacific.
The benchmark Eurekahedge Hedge Fund Index was up 0.89% in February and 3.26% year-to-date. Total assets under management decreased by US$1.6 billion during the month as the sector witnessed performance-based increase of US$6.7 billion while registering net asset outflows of US$8.3 billion. The total size of the industry now stands at US$2.32 trillion.
The Eurekahedge Hedge Fund Index was up 0.89% in February, supported by the continued recovery of the global equity market which pushed the MSCI AC World Index 3.03% higher. The majority of hedge fund managers tracked by Eurekahedge recorded positive returns in February, with those utilising long/short equities and event driven strategies outperforming other mandates. The patient wait-and-see approach to raising rates from the US Federal Reserve and optimistic anticipation over the potential resolution of the US-China trade war helped sustain the global equity market performance throughout the month. Apart from that, slowing economic growth across the globe has prompted central banks to raise concerns over lower inflation and cut their short-term growth forecasts, resulting in lower yields in the bond markets.
The Eurekahedge Hedge Fund Index gained 0.89% in February , bringing its year-to-date return to 3.26%. The risk-on sentiment among investors driven by the Fed’s patient stance and optimism over the potential resolution of the US-China trade tension persisted through the month, sending global equity markets on a rally through February. The MSCI AC World Index (Local) gained 3.03% during the month, resulting in 10.61% year-to-date return over the first two months of 2019. On the other hand, growth forecast cuts from developed economies’ central banks raised concerns over lower inflation, sending bond yields lower throughout the month.
Greater China equity hedge funds ended 2018 down 14.78% after posting negative monthly returns over the better part of the year as fund managers struggled to generate profits amidst the volatile market. The escalation of the US-China tariff spat, combined with the US Federal Reserve’s aggressive rate hikes throughout the year severely weighed on the equity markets across the emerging markets, and especially China. Difficult trading situation arising from the return of market volatility and equity market sell-offs resulted in substantial performance-driven losses for the managers comprising the region’s US$28.7 billion hedge fund industry.
The Eurekahedge North American Hedge Fund Index was up 3.66% in January 2019, underperforming the region’s equity markets as represented by the MSCI North America IMI which gained 8.51% over the month. North American hedge fund managers ended 2018 down 2.97% as concerns over the US-China trade tension and fed rate hikes weighed on their returns. Going into 2019, fund managers kicked off the year by recording strong gains in January, thanks to the improving optimism over the US-China trade talks. On the other hand, the US Federal Reserve has adopted a patient, wait-and-see stance for their future rate decisions as a response to the muted inflation caused by the sharp decline of oil prices and the risk of global economic slowdown. The dovish tone exhibited by the Fed acted as a tailwind to the US equity markets and pushed the S&P 500 and DJIA by 7.69% and 7.17% higher respectively in January, recovering a sizeable portion of the steep losses they suffered in December last year.
Eurekahedge’s North American hedge funds infographic sums up the industry as at March 2019. Find out more about North American hedge funds assets under management (AUM), asset flows into strategic and regional mandates, strategy returns, fund size and geographic AUM, head office locations and the best and worst performances of the year.
FK Capital Management Ltd. delivers a distinct value-oriented long/short equity strategy centred on achieving long-term capital growth and avoiding large drawdowns. Based in the Bahamas, the Firm combines an independent view of value investing, a commitment to following game-changing trends and forward-thinking brands poised to capture next-generation consumption patterns driven by Millennials and Gen Z. FK Capital integrates growth into its value investment strategy, with each holding supported by a catalyst that will accelerate long-term earnings. As a long-biased fund that’s poised to capitalise on key demographic and cultural shifts, the fund has significant exposure to global Information Technology and Consumer Discretionary opportunities – where disruption is occurring.
The Cayman Islands is one of the most utilised international finance centres (IFC) in the Asian finance industry. The largest and most populous continent, Asia covers a diverse cultural landscape, with highly differing economies, laws and regulations and it is against this backdrop that the use of Cayman structures has been established as a legitimate and important channel for capital inflows and outflows between Asia countries and around the globe. In particular, they have been highly utilised across Asia in capital markets, structured finance, M&A, and in the funds industry, most notably in Hong Kong, Singapore, China and Japan.
Disclosure of charges is regulated and standardised for retail investors, but is currently less so for institutional investors. Consequently, institutional investors are finding it difficult to obtain and analyse cost data from asset managers or accurately compare costs across the market.
This was one of the findings of the FCA’s Asset Management Market Study in 2017, which prompted the creation of the Institutional Disclosure Working Group (IDWG). Off the back of the IDWG’s recommendations, the ‘Cost Transparency Initiative’ (CTI), a partnership initiative between the Pensions and Lifetime Savings Association, the Investment Association (IA), and the Local government Pension Scheme Advisory Board (LGPS), was launched in November 2018.
Recent changes to the way the United States regulates foreign investment in its technology assets have highlighted an interesting contrast to Australia’s approach.
Late last year, President Trump signed into law the Foreign Investment Risk Review Modernisation Act (FIRRMA). FIRRMA significantly expands the type of transactions that are subject to review by the Committee on Foreign Investment in the United States (CFIUS), to include ‘other investments’ involving critical infrastructure, critical technologies or personal data.
The flexible and pragmatic approach adopted by the GFSC in relation to investment funds aimed at the institutional or high net worth investor market has helped the significant growth of this sector in Guernsey.
Nowadays, most funds formed in Guernsey tend to be for the institutional or high net worth individual markets, with hedge funds, funds of hedge funds, private equity and property funds being especially popular.
Guernsey is particularly keen to attract high quality hedge fund business. Following consultation with the industry, the GFSC released a guidance note in November 2003 setting out a more relaxed framework for the operation of hedge funds, which included waivers of the various fund rules in four key areas.
An increasingly sophisticated and active OCIE division, innovative market disruptors, a maturing credit cycle, and a philosophical change in how the private fund industry views and utilizes litigation are likely to lead to increased regulatory scrutiny and litigation risk for advisers (and their funds) in 2019. With that backdrop, we are pleased to present our Top Ten Regulatory and Litigation Risks for Private Funds in 2019.
The UK's new regime introducing a charge to UK tax on non-UK residents' investment gains from UK commercial real estate is unfortunately complex, making it difficult for investors to understand the practical impact on any particular existing or proposed holding structure. However, although the regime is not yet even in force and its impact on the market still in process, it is possible to suggest some basic rules of thumb which may be helpful in starting an analysis.
The benchmark Eurekahedge Hedge Fund Index in January. Total assets under management increased by US$16.9 billion during the month as the sector witnessed performance-based increase of US$22.1 billion while registering net asset outflows of US$5.3 billion. The total size of the industry now stands at US$2.31 trillion.
The Eurekahedge Hedge Fund Index rallied 2.32% in January, supported by the strength in global equity markets which pushed the MSCI AC World Index 7.36% higher, recovering from the losses it suffered back in December. Cautious tone from the Federal Reserve and positive expectations on the US-China trade talk resulted in strong gains across the global equity and fixed income markets during the month, despite lingering concerns over slowing economic growth. Weaker US dollar and improving trade outlook acted as tailwinds for fund managers with exposure toward Asia and emerging markets in general, resulting in positive returns across geographic mandates throughout the month.
The Eurekahedge Hedge Fund Index kicked off the year with a solid showing, as it gained 2.32% in January, in contrast to how the index declined 4.08% last year, following five consecutive months of losses. Dovish stance exhibited by the Federal Reserve signalled higher level of flexibility in future rate changes, and together with greater optimism over trade talk progresses between the United States and China they supported the global equity market performance throughout the month.
The Eurekahedge Funds of Funds Index ended 2018 down 4.58%, trailing behind the average hedge fund which would have lost 4.08% throughout the year. The persistent underperformance of multi-manager funds in terms of net returns has sparked questions over the value proposition offered by such structure, which was supposed to provide investors access to a wider pool of fund managers, as well as cheaper due diligence costs for smaller investors planning to invest in multiple single manager hedge funds.
Since the onset of the global financial crisis, investors worldwide have grown more cautious in undertaking investments and have increased their demands for underlying investment products and instruments to be monitored by international compliance standards. The Undertakings for Collective Investment in Transferable Securities or ‘UCITS’ was developed to meet this post-crisis demand, as UCITS embodied by strong regulation resulting to a high level of investors protection with certain restrictions such as liquidity of the underlying assets and leverage caps to provide added transparency to investors.
The Islamic finance industry is a niche market predominantly serving the needs of the world’s Muslim population. Products marketed under the umbrella of Islamic finance comply with a different investment philosophy as opposed to traditional investment philosophy which the rest of the world are familiar with. Under a Shariah-compliant framework, transactions which are considered to be unethical under Islamic law are prohibited and instead, fund managers invest in products which are compliant with Islamic guidelines.
Eurekahedge’s UCITS hedge funds infographic sums up the industry as at February 2019. Find out more about UCITS hedge funds assets under management (AUM), asset flows into strategic and regional mandates, strategy returns, fund size and geographic AUM, head office locations and the best and worst performances of the year.
Luxembourg has transposed MiFID II into its national law, albeit five months after the deadline for doing so. In other matters, the Luxembourg supervisory authority, the Commission de Surveillance du Secteur Financier (CSSF) issued two circulars in August: one reshaping the organisational rules for Luxembourg UCITS management companies, self-managed UCITS, authorised AIFMs and internally managed AIFs; the second, providing guidance as to the requirements for Luxembourg depositaries servicing Luxembourg AIFs (other than Part II UCIs marketed to retail investors), as well as SIFs and SICARs that do not qualify as AIFs. These developments are discussed below.
The Situation: The Office of Compliance Inspections and Examinations ("OCIE") of the U.S. Securities and Exchange Commission has released its 2019 Examination Priorities ("Report"). The Result: The Report details key areas where OCIE currently intends to focus its examination resources in 2019. The Report's key areas that should be of particular interest for private fund advisers (e.g., advisers to real estate, hedge, private equity, and venture capital funds) include fees and expenses, conflicts of interest, portfolio management and trading, digital assets, and cybersecurity.
On 13 December 2018, the Finnish Government published a legislative proposal aimed at eliminating problems in tax legislation relating to the establishment of private equity funds in the form of limited partnerships. The taxation of investors in private equity funds operating in a form of a Finnish limited partnership has, in certain respects, been based on established case law and tax practice. The taxation of foreign investors was originally eased through a special provision enacted in 2005 (Income Tax Act section 9(5)). When the special provision applies, an investor, having limited tax liability in Finland and being a limited partner in Finnish PE fund operating in a form of a limited partnership, is taxed for its share of the income of the fund only to the extent the income would be taxable if received directly by that investor.
The benchmark Eurekahedge Hedge Fund Index was down 1.31% in December, down 3.85% year-to-date. Total assets under management decreased by US$23.5 billion during the month as the sector witnessed performance-based decrease of US$11.3 billion while registering net asset outflows of US$12.2 billion. The total size of the industry now stands at US$2.34 trillion.
The Eurekahedge Hedge Fund Index was down 1.31% in December , outperforming the MSCI AC World Index which declined 7.61% in what turned out to be the worst month of 2018 for global equity markets. Concerns over the Fed’s stance which turned out to be less Dovish than what investors expected triggered major equity sell-offs around the globe, and sent major equity indices plummeting during the month.
The Eurekahedge Hedge Fund Index ended the month of December down 1.31% , dragging its year-to-date decline to 3.85% after five consecutive months of losses. Concerns over the US treasuries yield curve inversion and further Fed tightening in 2019 triggered a sell-off across the global equity markets, marking December as the worst month of 2018 for equity markets.
The Eurekahedge ILS Advisers Index ended 2018 down 2.93%, recording its second consecutive year of losses after 2017, during which the index slumped 5.60%. The catastrophic losses incurred by Hurricane Florence in September and Hurricane Michael in October weighed on the ILS fund managers’ returns throughout the fourth quarter of the year.
Hedge fund managers were on track to record their worst year since the 2008 global financial crisis as the combined onslaught of the global trade tension, Fed rate hikes, and various political concerns weighed on their returns. The Eurekahedge Hedge Fund Index was down 2.53% as of November 2018 year-to-date, slightly ahead of the underlying equity markets as represented by the MSCI AC World Index which slumped 2.72% over the same period. The industry kicked off the year with strong performance throughout January 2018, continuing the trend observed by the hedge fund industry in 2017. However, market uncertainty arose when the Trump administration imposed higher tariffs against imported Chinese goods due to their alleged unfair trade practices.
Eurekahedge’s global hedge funds infographic sums up the industry as at January 2019. Find out more about global hedge funds assets under management (AUM), asset flows into strategic and regional mandates, strategy returns, fund size and geographic AUM, head office locations and the best and worst performances of the year.
Matthew Swann is Principal, Hiscox Re Insurance Linked Strategies, a US$1.6+ billion ILS fund manager within global specialty insurance group Hiscox Ltd (LND: HSX). Matthew joined Hiscox in 2007 as a catastrophe modeler where he developed retrocession pricing tools before moving to reinsurance underwriting in 2011. He joined Hiscox Re ILS in 2015 as Portfolio Manager and is currently responsible for advising on investment and product strategy, and business development. Matthew holds a geography degree from the University of Oxford and a PhD in climate prediction from the University of East Anglia.
Securitisation is the issuance of tradable financial instruments backed by a single asset or a group of assets. Through securitisation, assets receive an additional layer of accessibility in the financial markets, allowing for the funding of an investment strategy, or for financing based on an organisation’s creditworthiness, cash flow and/or collateral. The result of securitisation is a tradable financial instrument that can be purchased globally through brokerage accounts.