Research

Hedge Fund Performance

September 2022 | With Intelligence


The Eurekahedge Hedge Fund Index gained 0.04% in August, a second consecutive month of positive returns following a 1.5% gain in July, even as the broader markets continued to plummet, as reflected in the 4.2% decline of the S&P 500. Hopes for a dovish pivot in monetary policy in early 2023 were dashed after Federal Reserve chair Jerome Powell reiterated the need to maintain tight monetary policy and avoid loosening policy too early as inflation remained stubbornly high at 8.3% in August.

Hedge Fund Performance Commentary

August 2022 | With Intelligence


The Eurekahedge Hedge Fund Index gained 1.3% in July, recording its highest monthly return since April 2021 after three consecutive months of decline, totaling 4.1% in Q2. The recovery was bolstered by the revival of the global equity market, reflected in the 9.1% rebound of the S&P 500. The Federal Reserve raised interest rates by another 75bps in July to combat persistent high inflation, which accelerated to 9.1% in June 2022, the highest since November 1981. However, a slower pace of rises is likely in the mid-term as US GDP contracted 0.9% in Q2, following a 1.6% contraction in Q1, putting the country into a recession.

Key Trends in European Hedge Funds (May 2022)

May 2022 | Eurekahedge


The Eurekahedge European Hedge Fund Index was down -4.04% as of March 2022 year-to-date, outperforming the Euro Stoxx 50 which declined -9.21% over the same period. European equity markets suffered sharp declines over the first three months of 2022 as the escalating Russia-Ukraine conflict elicited severe economic sanctions on Russia from the US and their allies in a bid to cripple the Russian economy and war effort.

European Hedge Funds Infographic May 2022

May 2022 | Eurekahedge


Eurekahedge’s European hedge funds infographic sums up the industry as at March 2022. Find out more about European 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 Trends in Global Hedge Funds (April 2022)

April 2022 | Eurekahedge


The Eurekahedge Hedge Fund Index was down 2.00% year-to-date as of February 2022, outperforming the underlying global equity market as represented by the S&P 500 which was down 8.23% over the same period. 2020 was a very challenging year for global hedge funds as economic and market conditions were particularly dire.

Global Hedge Funds Infographic April 2022

April 2022 | Eurekahedge


Eurekahedge’s Global hedge funds infographic sums up the industry as at April 2022. 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.

Trade Finance Hedge Fund: An alternative asset class amidst the rising yields environment

March 2022 | Eurekahedge


Trade finance hedge funds have gained traction over the recent years, driven by investor demand for alternative asset classes with low volatility and consistent return, as well as low correlation against the broader financial market. The sector began its rapid growth following the global financial crisis in 2008, when banks started reducing their trade finance exposure to meet Basel III capital requirements.

Key Trends in Asian Hedge Funds (March 2022)

March 2022 | Eurekahedge


The Eurekahedge Asian Hedge Fund Index was down -3.02% year-to-date as of January 2022, outperforming the underlying equity market as represented by the MSCI AC Asia Pacific IMI, which retreated -4.16% over the same period. In 2020, the Eurekahedge Asian Hedge Fund Index suffered significant losses in the first quarter of the year as news of the rapidly spreading coronavirus hammered equity markets globally, resulting in the index declining by -8.72% in the first quarter of the year.

Asian Hedge Funds Infographic March 2022

March 2022 | Eurekahedge


Eurekahedge’s Asian hedge funds infographic sums up the industry as at March 2022. 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.

Value Investing: hidden gems in a rising interest rate environment

February 2022 | Eurekahedge


In the aftermath of the COVID-19 crisis, central banks and government authorities injected massive amounts of economic stimulus to support their economies from the market meltdown which led to a rapid increase in money supply, pushing up consumer prices. In the same vein, the ongoing global economic recovery and winter season in Europe has led to a surge in global demand and pushed energy prices back to pre-pandemic levels, exacerbating the already high consumer prices.

Key Trends in Latin American Hedge Funds (February 2022)

February 2022 | Eurekahedge


The Eurekahedge Latin American Hedge Fund Index retreated -2.95% in 2021, outperforming the MSCI EM Latin America Index which declined -7.58% over the same period. GDP in the Latin American region declined by 6.8% in 2020, driven by the economic collapse caused by the onset of the COVID-19 pandemic.

Latin American Hedge Funds Infographic February 2022

February 2022 | Eurekahedge


Eurekahedge’s Latin American hedge funds infographic sums up the industry as at February 2022. Find out more about Latin 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.

Hedge Fund Strategy Performance Overview

January 2022 | Eurekahedge


Global hedge funds recorded higher returns in recent months as they benefitted from the strong recovery of risk assets, particularly equities. Global hedge funds gained 9.27%, 13.20%, and 9.37% annually from 2019 to 2021 respectively, marking their best three year performance since 2007.

North American Hedge Funds Infographic January 2022

January 2022 | Eurekahedge


Eurekahedge’s North American hedge funds infographic sums up the industry as at January 2022. 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.

Key Trends in North American Hedge Funds (January 2022)

January 2022 | Eurekahedge


The Eurekahedge North American Hedge Fund Index was up 12.47% year-to-date as of November 2021, driven by the strong performance of the underlying equity market as represented by the MSCI North America IMI, which gained 19.87% over the same period

Long-Only Absolute Return Funds Infographic December 2021

December 2021 | Eurekahedge


Eurekahedge’s long-only absolute return funds infographic sums up the industry as at December 2021. Find out more about long-only absolute return 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.

CTA/managed futures strategy profile – A good alternative to gain exposure to commodities

November 2021 | Eurekahedge


CTA/managed futures hedge funds gained 5.89% over the first three quarters of 2021, thanks to the sharp increase in commodity prices, particularly in the energy sector over the recent period. In early 2020, energy prices reached uncharted territory as the COVID-19 outbreak resulted in a global economic shutdown, which completely dampened the demand for oil. As a result, the value of crude oil dropped to zero, and its contract value in the futures market fell to negative territory, which was unpr

Global Hedge Funds Infographic November 2021

November 2021 | Eurekahedge


Eurekahedge’s Global hedge funds infographic sums up the industry as at November 2021. 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 Trends in Global Hedge Funds (November 2021)

November 2021 | Eurekahedge


The Eurekahedge Hedge Fund Index was up 8.15% year-to-date as of September 2021, trailing the underlying global equity market as represented by the MSCI ACWI IMI, which was up 11.99% over the same period. 2020 was a very challenging year for global hedge funds as economic and market conditions were particularly dire. Global equities took a huge beating, particularly in March 2020 when the World Health Organisation declared COVID-19 a global pandemic.

Cryptocurrency hedge funds: Managing the risks of investing in this highly volatile asset class

October 2021 | Eurekahedge


The Eurekahedge Cryptocurrency Hedge Fund Index was up 238.40% over the first eight months of 2021, outperforming Bitcoin which returned 163.35% over the same period. In 2020, cryptocurrencies were undoubtedly the best-performing asset class in the market, with Bitcoin posting a 300.17% return during the year. Bitcoin unexpectedly benefitted from the ongoing COVID-19 crisis as investors perceived the coin as an alternative safe-haven asset during market uncertainties. As a result, the market value of Bitcoin increased by more than 600% from its March 2020 low to the end of August 2021.

European Hedge Funds Infographic October 2021

October 2021 | Eurekahedge


Eurekahedge’s European hedge funds infographic sums up the industry as at October 2021. Find out more about European 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 Trends in European Hedge Funds (October 2021)

October 2021 | Eurekahedge


The Eurekahedge European Hedge Fund Index was up 7.83% as of August 2021 year-to-date, supported by the robust performance of the MSCI AC Europe IMI (Local) which gained 17.12% over the same period. In the first eight months of 2021, European equity markets posted robust gains despite the continued spread of COVID-19 in the region as many large Eurozone countries have achieved high levels of vaccine coverage which helped to alleviate the need to implement costly lockdowns and enabled their economies to remain largely open.

Asset Flows Update

September 2021 | Eurekahedge


The Eurekahedge Hedge Fund Index was up 0.76% in August, trailing behind the global equity market as represented by the MSCI ACWI (Local) which gained 2.45% over the same period. Global markets were buoyed by a rise in investor risk appetite due to the continuation of highly accommodative monetary policies and the dovish comments made by Federal Reserve chairman Jerome Powell during the Jackson Hole symposium.

Key Trends in Latin American Hedge Funds (September 2021)

September 2021 | Eurekahedge


The Eurekahedge Latin American Hedge Fund Index was up 2.10% as of July 2021 year-to-date, narrowly underperforming the MSCI EM Latin America Index, which gained 2.60% over the same period. The slow vaccination rollout in the Latin American region has necessitated the imposition of lockdowns in a bid to slow down the spread of the highly infectious COVID-19 virus, negatively impacting the economic recovery in the region. Most Latin American countries have struggled to secure sufficient vaccine doses due to logistical challenges that has impeded the vaccine rollout. The emergence of the Lambda variant in the region has led to worries that the pandemic could worsen, especially since studies have revealed that the Lambda variant confers significant resistance to neutralising antibodies induced by the inactivated CoronaVac vaccine, one of the major vaccines used in Latin America. As such, GDP levels in the region is expected to return to pre-pandemic levels only by the end of 2022, transla

Latin American Hedge Funds Infographic September 2021

September 2021 | Eurekahedge


Eurekahedge’s Latin American hedge funds infographic sums up the industry as at September 2021. Find out more about Latin 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.

Key Trends in Emerging Market Hedge Funds (September 2021)

September 2021 | Eurekahedge


Emerging market hedge funds were up 4.32% over the first seven months of 2021, trailing behind their developed market counterparts in North America, Japan and Europe which returned 10.99%, 6.71% and 6.68% respectively. The economic recovery in the emerging markets has lagged their developed market counterparts due to delays in vaccine rollouts that had necessitated the imposition of harsh lockdown measures to prevent hospital systems from getting overwhelmed.

Greater China hedge funds: Daunting challenges ahead in 2021 and beyond

September 2021 | Eurekahedge


The Eurekahedge Greater China Hedge Fund Index was down 4.20% in July, reducing its year-to-date return to 1.66%. In comparison, the underlying equity market in the region as represented by the MSCI China Golden Dragon IMI recorded a loss of 9.60% over the same period. A month after Didi Global Inc. celebrated its debut in the NYSE which makes them the biggest IPO of Chinese companies listed in the US, Beijing abruptly announced a stricter policy for domestic companies listing offshore, particularly in the US. The move by the government of China raised concerns among investors who fear a wave of potential delisting of Chinese companies in the US. As a result, the region's equity market experienced a massive sell-off during the month, with the Hang Seng down by 9.94%, while China’s Shanghai Composite fell 5.40% throughout the month. Looking back at 2020, Greater China fund managers benefitted from the strong performance of the equity market in the region, supported by the rapid recovery

Asset Flows Update

August 2021 | Eurekahedge


The Eurekahedge Hedge Fund Index was down 0.27% in July, trailing behind the global equity market as represented by the MSCI ACWI (Local) which gained 0.40% over the same period. The steady progress of the COVID-19 vaccine rollout in several major developed markets enabled the relaxation of mobility restrictions which provided support to the global economic recovery. However, investor sentiment was dampened by the spread of the highly infectious Delta variant of COVID-19, leading to concerns that the economic momentum would not be sustainable.

ESG fund: Consistently delivering alpha amidst the ongoing pandemic

August 2021 | Eurekahedge


Investors are increasingly beginning to incorporate ethical considerations into their investment decisions, a development which has given rise to the ESG framework over the years. Despite the implementation challenges which arise when screening investments against acceptable environmental, social and corporate governance themes, the trend towards a more conscientious approach to investment is here to stay, especially from the perspective of large institutional investors. Fund managers, for both actively and passively managed investment vehicles are balancing their quest for superior returns with the need to meet investor demand for responsible investing. Further, an understanding that such an approach to investment can translate into ‘ESG-induced alpha’ for managers is further helping the cause of ethically guided investing. This piece looks at the performance of funds, both long-only absolute return vehicles and hedge funds, with an active ESG investment framework and how they have pe

Key Trends in North American Hedge Funds (August 2021)

August 2021 | Eurekahedge


The Eurekahedge North American Hedge Fund Index was up 11.34% year-to-date as of June 2021, driven by the strong performance of the underlying equity market as represented by the MSCI North America Index AC, which gained 14.68% over the same period. Covid-related mobility restrictions in most developed markets continued to be progressively relaxed as vaccination rates rise, providing support to the reopening of their economies. The swift rebound in economic activity led to higher inflation in some countries, most notably in the United States where in June, the US consumer price index increased by 5.4% year-on-year – the sharpest 12-month inflation spike since August 2008.

North American Hedge Funds Infographic August 2021

August 2021 | Eurekahedge


Eurekahedge’s North American hedge funds infographic sums up the industry as at August 2021. 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.

Asset Flows Update

July 2021 | Eurekahedge


The Eurekahedge Hedge Fund Index was up 0.26% in June, trailing behind the global equity market as represented by the MSCI ACWI (Local) which gained 1.93% over the same period. Covid-related mobility restrictions in most developed markets continued to be progressively relaxed as vaccination rates rise, providing support to the reopening of their economies.

Indian hedge funds outperformed global peers amid COVID-19 pandemic

July 2021 | Eurekahedge


Indian hedge funds outperformed their global peers by a large margin in 2020, supported by the strong performance of the Indian equity market over the year. Despite the Indian economy’s 7.7% contraction in 2020 as a result of the devastating impact of the coronavirus pandemic, the Eurekahedge India Hedge Fund Index generated 19.88% return over 2020, dwarfing the 12.66% return posted by the Eurekahedge Hedge Fund Index over the same period, which also happened to be the best annual performance of the global hedge fund industry since 2009. However, most of those gains were generated through exposure toward the fast-growing equity market of the country, raising the question of whether some of these hedge fund managers actually generate enough alpha for their investors to justify their management and performance fees.

Key Trends in Asian Hedge Funds (July 2021)

July 2021 | Eurekahedge


The Eurekahedge Asian Hedge Fund Index was up 6.63% year-to-date as of May 2021, supported by the strong performance of the underlying equity market as represented by the MSCI Asia Pacific IMI, which gained 7.10% over the same period. Driven by the encouraging progress on vaccine roll-out in some areas in Asia, accommodative government policies and normalisation of economic activity, the equity market in the region continued to strengthen over the year. Hang Seng gained 7.05% over the first five months of 2021, while TOPIX posted 6.56% over the same period. Over in India, despite the recent surge of new COVID-19 cases which overwhelmed their healthcare sector, the economic growth outlook in the region remained strong which contributed to the strong performance of the equity market in the region. NIFTY 50 was up 6.50% in May, pushing its 2021 year-to-date return to 11.45%.

Asian Hedge Funds Infographic July 2021

July 2021 | Eurekahedge


Eurekahedge’s Asian hedge funds infographic sums up the industry as at July 2021. 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.

Asset Flows Update

June 2021 | Eurekahedge


The Eurekahedge Hedge Fund Index was up 0.87% in May, supported by the robust performance of the global equity market as represented by the MSCI ACWI (Local) which gained 0.83% over the same month. Year-on-year US inflation rose to 5.0% for May from 4.2% in April, the highest level in over a decade. The heightened inflation figures worried investors who were concerned that this could force the Federal Reserve to tighten monetary policy earlier than expected to achieve its 2% average inflation goal.

Long Volatility/Tail Risk: A perfect way to hedge your portfolio against market uncertainties

June 2021 | Eurekahedge


The return of market volatility on the back of the ongoing COVID-19 pandemic around the globe and the retail trading frenzy of meme stocks like GameStop and AMC Entertainment has pushed two particular niche hedge fund strategies back into the spotlight; the CBOE Eurekahedge Long Volatility Hedge Fund Index and the CBOE Eurekahedge Tail Risk Hedge Fund Index returned 25.41% and 34.84% respectively in 2020. The two strategies which provide crisis alpha and protection for institutional portfolios have long since generated debates among asset owners and academics alike.

Key Trends in UCITS Hedge Funds (June 2021)

June 2021 | Eurekahedge


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 is embodied by strong regulation, resulting in a high level of investor protection with certain restrictions such as liquidity of the underlying assets and leverage caps to provide added transparency to investors.

UCITS Hedge Funds Infographic June 2021

June 2021 | Eurekahedge


Eurekahedge’s UCITS hedge funds infographic sums up the industry as at June 2021. 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.

Asset Flows Update

May 2021 | Eurekahedge


The Eurekahedge Hedge Fund Index was up 2.16% in April, supported by the robust performance of the global equity market as represented by the MSCI ACWI (Local) which gained 3.53% over the same month. Better than expected macroeconomic data and strong corporate earnings boosted the performance of the equity market as the S&P500 returned 5.24% in April. The Federal Reserve reassured the market that monetary policy will remain accommodative to support economic growth amid lingering fears that the emergence of new variants of COVID-19 could lead to recurring waves of infections and derail the recovery of the global economy.

High performing hedge funds retain ability to charge standard '2 and 20' fee structure and above despite overall trend of declining fees

May 2021 | Eurekahedge


The global hedge fund industry has witnessed a trend of declining management and performance fees over the past decade, calling into question the traditional “2 and 20” fee structure the industry was famous for. Mediocre returns over recent years – as opposed to the double-digit annual returns investors had come to expect from hedge funds pre-2008 along with increasing competition within the industry and tighter regulation over alternative investment vehicles are some key factors which have contributed to this trend. Investor experience during the 2008 global financial crisis had resulted in more disintermediation within the industry, with institutional investors engaging hedge fund managers directly. Faced with more proactive and demanding investors, many hedge fund managers ended up lowering their fees, or adopting stricter hurdle rates and shorter lockup periods. Nevertheless, as we will discuss in this piece, a sizeable part of the hedge fund industry has continued to maintain leve

Key Trends in European Hedge Funds (May 2021)

May 2021 | Eurekahedge


The Eurekahedge European Hedge Fund Index was up 3.83% as of March 2021 year-to-date, supported by the robust performance of the underlying equity market in the region as reflected by the 7.02% return of the MSCI AC Europe IMI over the same period. The speedy COVID-19 vaccine rollout on top of the accommodative monetary policy exhibited by the European Central Bank to support the economies from the ongoing crisis acted as a tailwind to the equity market in the region. The EURO STOXX 50 which represents the leading blue-chip companies in the Euro Zone recorded a double-digit return of 11.88% over the first three months. In the same vein, DAX and CAC 40 were up 9.40% and 9.29% over the same period thanks to the gradual economic recovery in the region as seen on their strong macroeconomic data.

European Hedge Funds Infographic May 2021

May 2021 | Eurekahedge


Eurekahedge’s European hedge funds infographic sums up the industry as at May 2021. Find out more about fund of 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.

Asset Flows Update

April 2021 | Eurekahedge


The Eurekahedge Hedge Fund Index was up 0.95% in March 2021, supported by the robust performance of the global equity market as represented by the MSCI ACWI (Local) which gained 3.24% over the same period. The Federal Reserve reaffirmed their commitment to keep monetary policy accommodative for at least another two years and allow inflation to rise above 2% before considering any rate hikes. This led to increased inflation expectations among investors and continued selling pressure on long-dated US treasures. The yield of the 10-year treasury note rose by 34bp to end the month at 1.744%, more than doubling the 0.842% yield at the end of November 2020. The equity market in the United States continued to record strong returns in March 2021, with the DJIA gaining 6.62% and the S&P 500 gaining 4.24%. Equities were supported by the US$1.9 trillion economic stimulus package rolled out by the Biden administration as well as the continued speedy rollout of vaccinations.

Fixed income-focused hedge funds: Return profile across the years

April 2021 | Eurekahedge


Since the aftermath of the Global Financial Crisis in 2008, the Federal Reserve has kept interest rates at zero to keep borrowing costs low and spur economic growth. This policy had persisted until December 2015 when the Federal Reserve Chair Janet Yellen started the Fed back on a rate-hiking path in a bid to bring interest rates back to normal levels and reduce the size of the Fed’s balance sheet. The target funds rate was increased by 25 basis points from 0.25 to 0.5 percent, marking the first increase in interest rates since the key rate was increased to 5.25 percent on June 29, 2006.

Key Trends in Global Hedge Funds (April 2021)

April 2021 | Eurekahedge


The Eurekahedge Hedge Fund Index was up 3.83% year-to-date as of February 2021, outperforming the underlying global equity market as represented by the MSCI ACWI IMI, which was up 2.73% over the same period. 2020 was a very challenging year for global hedge funds as economic and market conditions were particularly dire. Global equities took a huge beating, particularly in March 2020 when the World Health Organisation declared COVID-19 a global pandemic. The MSCI ACWI IMI declined a staggering 13.99% in March 2020, negatively impacting the performance of global hedge funds as they lost 6.35% during the month.

Global Hedge Funds Infographic April 2021

April 2021 | Eurekahedge


Eurekahedge’s global hedge funds infographic sums up the industry as at April 2021. Find out more about fund of 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.

Asset Flows Update

March 2021 | Eurekahedge


The Eurekahedge Hedge Fund Index was up 2.99% in February 2021, outperforming the global equity market as represented by the MSCI ACWI which gained 2.72% over the same period. The global equity markets rallied strongly in the first two weeks of February, supported by strong corporate earnings and the increased likelihood that Biden’s new US$1.9 trillion economic stimulus package will be approved by Congress even in the absence of Republican support. In addition, the continued speedy rollout of vaccines across the United States led to optimism that a greater relaxation of virus control measures will be possible and allow the economy to return to normalcy sooner. These factors led to a sharp increase in inflation expectations and a significant rise in the yield of global longer tenor bonds.

Tech-focused hedge funds: sustaining returns in a rising rate environment

March 2021 | Eurekahedge


The stellar performance of technology stocks in 2020 amid the COVID-19 pandemic has led to outsized returns for investors who have placed bets in technology stocks. The tech-heavy NASDAQ Composite rose 43.64% in 2020, posting the highest return recorded by the index since 2009 and outperforming the broader S&P 500 which rose 16.26%. Technology stocks benefited from the COVID-19 induced lockdowns as people brought forward their technology purchases to enable themselves to work from home productively and stay connected to their friends and colleagues. In addition, technology stocks were also supported by the Federal Reserve’s emergency move in March 2020 to cut benchmark interest rates to zero and restart quantitative easing. As technology stocks are generally regarded as long-duration, the fall in interest rates increased the present value of their future earnings by a larger extent and supported their share prices.

Asset Flows Update

February 2021 | Eurekahedge


The Eurekahedge Hedge Fund Index was up 0.54% in January 2021, outperforming the global equity market as represented by the MSCI ACWI which gained 0.11% over the same period. Global equities went on a roller coaster ride this month as their gains in the first three weeks were erased in the final week of the month due to market turbulence caused by the retail trading mania. In the US, Democratic Party candidates Jon Ossoff and Raphael Warnock defeated their Republican opponents in two runoff elections in Georgia, granting the Democrats control of the House, Senate and White House for the first time since 2011. This led to increased optimism that the Democrats would be able to push President Biden’s proposal for a US$1.9 trillion coronavirus relief package through the Senate without Republican support. However, market risk sentiment rapidly deteriorated as retail investors and notable hedge funds clashed over GameStop stock, negatively affecting investors’ confidence in the stability o

Asian Hedge Funds Infographic February 2021

February 2021 | Eurekahedge


Eurekahedge’s Asian hedge funds infographic sums up the industry as at February 2021. 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.

Asset Flows Update

January 2021 | Eurekahedge


The Eurekahedge Hedge Fund Index was up 3.30% in December 2020, supported by the strong performance of the global equity market as represented by MSCI ACWI which gained 4.04% during the month. In 2020, global hedge funds ended the year in double-digit performance with 11.68% return, recording their best annual performance in over a decade, despite the ongoing pandemic. In the earlier months of 2020, the COVID-19 outbreak forced non-essential businesses to temporarily cease their operations. This in turn caused a shutdown of broader economic activity resulting in the sharp increase in unemployment rate. Unemployment rate reached 14.8% in April 2020 in the US – a level that has not been seen since the Great Depression. However, risk assets made a strong comeback since end-March, supported by the massive economic stimulus, low-interest rates, reopening of the major economies, and positive development of COVID-19 vaccines which boosted the performance of the global equity market.

North American Hedge Funds Infographic January 2021

January 2021 | Eurekahedge


Eurekahedge’s North American hedge funds infographic sums up the industry as at January 2021. 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.

Asset Flows Update

December 2020 | Eurekahedge


The Eurekahedge Hedge Fund Index was up 4.50% in November 2020 on the back of the robust performance of the global equity market as represented by the MSCI ACWI which gained 11.63% over the same period. Global equities reacted positively to the relatively smooth conclusion of the US presidential election and better-than-expected results of the effectiveness of the COVID-19 vaccines, eclipsing worries about the near-term economic outlook. In Europe, despite the reimposition of restrictive lockdown measures across many countries in the region to curb the increasing number of new COVID-19 infections, European stock indices rallied strongly as news of the better-than-expected efficacy of several vaccine candidates led to optimism that the worst of the pandemic could soon be over.

Hedge Fund Performance Commentary

December 2020 | Eurekahedge


The Eurekahedge Hedge Fund Index was up 4.50% in November 2020, supported by the strong performance of the global equity market as reflected by the 11.63% return of the MSCI ACWI during the month. Global equities ended the month in strong positive territory due to the relatively smooth conclusion of the US presidential election and the announcement of three vaccines that are effective against COVID-19, eclipsing worries about the near-term economic outlook. Despite the reimposition of restrictive lockdown measures across many European countries to curb the increasing number of new COVID-19 infections, European stock indices rallied strongly as news of the better than expected efficacy of several vaccine candidates led to optimism that the worst of the pandemic could soon be over.

European Hedge Funds Infographic December 2020

December 2020 | Eurekahedge


Eurekahedge’s European hedge funds infographic sums up the industry as at December 2020. 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.

Asset Flows Update

November 2020 | Eurekahedge


The Eurekahedge Hedge Fund Index was down 0.05% in October 2020, outperforming the global equity market as represented by the MSCI ACWI (Local), which lost 2.29% over the same period. The reimposition of national lockdowns across Europe, uncertainty in the outcome of the US presidential election, and the breakdown in US fiscal stimulus talks, resulted in the negative performance of global equities during the month. The acceleration of daily COVID-19 cases in Europe forced the authorities to reimpose restrictive measures to curb the increasing number of new infections, which acted as a headwind to the performance of the equity market in the region.

Hedge Fund Performance Commentary

November 2020 | Eurekahedge


The Eurekahedge Hedge Fund Index was down 0.05% in October 2020, outperforming the global equity market as represented by the MSCI ACWI (Local), which slipped 2.29% over the same period. Global equities ended the month in negative territory due to the reimposition of national lockdowns across Europe, uncertainty in the outcome of the US presidential election, and the breakdown in US fiscal stimulus talks.

Key Trends in Emerging Market Hedge Funds (November 2020)

November 2020 | Eurekahedge


Emerging market hedge funds were up 5.11% over the first three quarters of 2020, outperforming their developed market counterparts in North America, Europe and Japan which generated 3.99%, -1.51% and -3.37% respectively. In the first quarter of 2020, the Eurekahedge Emerging Markets Hedge Fund Index tumbled 10.66% as the coronavirus pandemic broke out in in Wuhan, China, forcing Chinese authorities to put the city on lockdown on January 23. As the pandemic worsened, the lockdown was extended to the rest of Hubei province and the World Health Organisation on January 30 declared the outbreak a global public-health emergency. On March 11 2020, the World Health Organisation officially declared the outbreak a pandemic as coronavirus cases began to increase sharply in many parts of the world and forced many countries to implement lockdown measures in a bid to halt the rapidly escalating number of cases and prevent healthcare systems from being overwhelmed.

Emerging Market Hedge Funds Infographic November 2020

November 2020 | Eurekahedge


Eurekahedge’s emerging market hedge funds infographic sums up the industry as at November 2020. 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.

Asset Flows Update

October 2020 | Eurekahedge


The Eurekahedge Hedge Fund Index was down 0.76% in September 2020, outperforming the global equity market as represented by the MSCI ACWI (Local), which lost 2.71% over the same period. Global equities ended their five-month rally over mounting concerns around Covid-19 cases globally which threaten to stall economic recovery given how ‘lockdowns’ continue to be the only modus operandi for governments in the absence of a vaccine. Markets are also beginning to worry over the limits of central bank monetary easing which has resulted in stretched valuations and limited real recovery on the main street, all this at a time when the second wave of Covid-19 is making landfall.

Hedge Fund Performance Commentary

October 2020 | Eurekahedge


The Eurekahedge Hedge Fund Index was down 0.57% in September 2020, outperforming the global equity market as represented by the MSCI ACWI (Local), which lost 2.71% over the same period. Global equities ended its five-month rally due to renewed concerns over new government restrictions to curb the increasing COVID-19 cases in Europe and the delay on new fiscal stimulus measures in the US Congress. In the US ahead of the upcoming presidential election, failure to reach a consensus over a new round of economic stimulus contributed to the weak performance of the equity market in the region. The tech-heavy NASDAQ and S&P 500 were down 5.16% and 4.10% during the month, respectively.

Key Trends in Global Hedge Funds (October 2020)

October 2020 | Eurekahedge


The Eurekahedge Hedge Fund Index was up 4.00% year-to-date as of August 2020, outperforming the underlying global equity market as represented by the MSCI ACWI IMI, which was down 0.89% over the same period. In the earlier months of 2020, the global equity market sharply declined due to the impact of COVID-19 pandemic, which stalled economic activity. The coronavirus started to spread outside Beijing in February, which heightened concerns among investors that resulted in back-to-back sell-off in the first quarter, particularly in March.

Global Hedge Funds Infographic October 2020

October 2020 | Eurekahedge


Eurekahedge’s global hedge funds infographic sums up the industry as at October 2020. 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.

Asset Flows Update

September 2020 | Eurekahedge


The Eurekahedge Hedge Fund Index was up 1.85% in August, bringing its year-to-date return to 3.79% and its five-month trailing return to 12.85% since end-March. Hedge fund managers benefitted from the robust performance of the global equity market as represented by the MSCI ACWI (Local) which gained 5.54% over the month. Risk assets reacted positively to the encouraging development of the COVID-19 vaccine and improving macroeconomic data. In the US, the deceleration of the spread of COVID-19 and the Fed's announcement on adopting a new inflation framework that could keep its policy rate lower for a longer period boosted the region's equity market during the month.

Hedge Fund Performance Commentary

September 2020 | Eurekahedge


The Eurekahedge Hedge Fund Index was up 1.85% in August, bringing its year-to-date return to 3.79% and its five-month trailing return to 12.85% since end-March. The robust performance of the global equity markets on the back of the encouraging development of the COVID-19 vaccine and improving macroeconomic data supported hedge fund managers' performance. In the US, the declining daily COVID-19 cases on top of the Fed's new inflation targeting framework boosted the region's equity market. The tech-heavy NASDAQ recorded the strongest return of 9.59%, while the S&P 500 was up 7.20% in August. The Fed shifted its approach to inflation to 'average inflation target' aiming to achieve an average inflation rate of two percent over time, which were expected to result in keeping the interest rates lower for an extended period.

Key Trends in Latin American Hedge Funds (September 2020)

September 2020 | Eurekahedge


The Eurekahedge Latin American Hedge Fund Index was up 0.21% as of July 2020 year-to-date, broadly outperforming the underlying equity market in the region as represented by the MSCI EM Latin America Index, which was down 13.59% over the same period. In 2019, Latin American fund managers gained 15.22%, outperforming their regional peers as the strong run of risk assets in the region supported the fund managers' performance throughout the year. However, risk aversion resurfaced in the first quarter of 2020 due to concern surrounding the spread of the coronavirus outside China.

Latin American Hedge Funds Infographic September 2020

September 2020 | Eurekahedge


Eurekahedge’s Latin American hedge funds infographic sums up the industry as at September 2020. Find out more about Latin 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.

Asset Flows Update

August 2020 | Eurekahedge


The Eurekahedge Hedge Fund Index was up 2.52% in July, supported by the robust performance of the underlying global equity markets as represented by the MSCI ACWI IMI (Local) which gained 3.67% over the month. The highlight of the month was the continued support for markets by global central banks, which once again pulled no surprises. While the debate around MMT (Modern Monetary Theory) continues to pick pace, in the presence of high unemployment and the absence of inflation, it appears that MMT proponents will have a walk over of sorts. This should continue to bode well for financial markets which are so far defying the natural laws of gravity that has otherwise stalled real economic activity globally. In the US, despite the fear of the increasing number of COVID-19 cases, the equity market in the region exhibited a strong run driven by the upbeat Q2 earnings of tech-companies, particularly the FAANG stocks, which beat market expectation.

Hedge Fund Performance Commentary

August 2020 | Eurekahedge


The Eurekahedge Hedge Fund Index was up 2.52% in July, bringing its year-to-date return to 1.65%, supported by the robust performance of the underlying global equity market as represented by the MSCI ACWI IMI (Local) which gained 3.67% over the same month. In the US, despite the fear of the increasing number of COVID-19 cases, the equity market in the region exhibited a strong run, with the tech-heavy NASDAQ up 8.82%, pushing its year-to-date return to 19.76%, while the S&P 500 returned 6.53% throughout the month, bringing its 2020 performance back into positive territory. The tech companies, particularly the FAANG group, benefitted from the pandemic which resulted in strong Q2 earnings. On the other hand, European equities underperformed owing to the escalation of the US-China trade tension and weak corporate earnings.

Key Trends in Asian Hedge Funds (August 2020)

August 2020 | Eurekahedge


The Eurekahedge Asian Hedge Fund Index was up 0.89% year-to-date as of June 2020, outperforming the underlying equity market as represented by the MSCI AC Asia Pacific IMI, which lost 7.18% over the same period. In 2019, Asian hedge funds registered 9.95% return, supported by the strong performance of the underlying equity market on the back of positive geopolitical development and accommodative central bank policies. Looking into 2020, the mandate suffered significant losses in the first quarter of the year owing to the COVID-19 outbreak, which originated in the province of Wuhan, China. The coronavirus was later declared by the World Health Organization (WHO) as a pandemic. The spread of the virus forced government authorities to impose lockdown that resulted in a temporary closure of non-essential businesses. The partial shutdown of economic activity pushed the unemployment rate higher, causing a global-wide massive sell-off in risk assets in February and March. The CSI 300 and Shan

Asian Hedge Funds Infographic August 2020

August 2020 | Eurekahedge


Eurekahedge’s Asian hedge funds infographic sums up the industry as at August 2020. 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.

Interview with Tony Bremness, CFA, Founding Partner, Managing Director & Chief Investment Officer at Laureola Advisors Inc.

August 2020 | Eurekahedge


Tony Bremness is a Partner, Managing Director, and Chief Investment Officer at Laureola Advisors Inc. Tony has extensive experience in investment analysis, portfolio construction, and risk control. Tony is a frequent speaker at Alternative Investment Conferences, with a focus on Life Settlements. He graduated with an MBA (1985 McGill University, Canada) and has been awarded the CFA accreditation (1991). Mr. Bremness has over 35 years of asset management experience, with portfolios ranging in size from $100,000 to over $10 billion. He has designed, structured, and launched several investment Funds, and has consulted to some of the world’s largest institutional investors on Asset Allocation and manager selection. Laureola Advisors was founded in 2012 and launched its first Fund in April 2013 to allow investors to access the non-correlated and stable returns offered by this unique asset class. Laureola Funds have won several awards over the 7+ year history. Being a boutique Manage

Asset Flows Update

July 2020 | Eurekahedge


The Eurekahedge Hedge Fund Index was up 1.38% in June, supported by the strong performance of the global equity market as represented by the MSCI ACWI IMI (Local), which returned 2.70% over the same month. The resumption of the economic activity of most countries, particularly in Europe and the US combined with an upbeat macroeconomic data, boosted market optimism towards a faster-than-expected recovery of the global economy from the crisis, which provided support to the performance of risk assets. In the US, strong labour data was recorded, particularly the nonfarm payroll that beat the market expectation by a substantial margin, acted as a tailwind to the performance in the region's equity market.

Hedge Fund Performance Commentary

July 2020 | Eurekahedge


The Eurekahedge Hedge Fund Index was up 1.38% in June, driven by the strong performance of the global equity market as represented by the MSCI ACWI IMI (Local), which gained 2.70% over the same month. Global equities benefitted from the resumption of economic activity of most countries combined with an upbeat macroeconomic data boosting investors' optimism towards a faster-than-expected recovery of the global economy from the crisis. The US equity benchmark registered strong performance, as the labour data, particularly the nonfarm payroll, beat the market consensus by a substantial margin. The tech-heavy NASDAQ was up 4.05% in June, bringing its year-to-date return to 10.05%, while the S&P500 was up 0.87% during the month. In the same vein, European equities rallied, supported by the proposed stimulus package totalling 750 billion euros by the EU leaders to soothe the economic pain brought by the coronavirus. The DAX and CAC 40 were up 6.25% and 5.12% over the month, respectively.

Greater China equity hedge funds: recovery in sight?

July 2020 | Eurekahedge


Greater China equity hedge funds ended 2019 up 15.49%, supported by the strong performance of the Chinese equity markets throughout the year on the back of improving geopolitical situations and accommodative central bank policies. The Eurekahedge Greater China Long Short Equities Hedge Fund Index which tracks 55 active Greater China-focused hedge funds utilising equity strategies slumped 14.74% in 2018 as mounting pressure from the escalating trade tension between China and the US weighed on the performance of Chinese equity markets. Volatile trading condition and various political concerns took their toll on Greater China equity hedge funds as they ended nine of the months of 2018 in the red. On top of the tariff spat between the Chinese government and the Trump administration, the continual protests in Hong Kong which resulted from the introduction of an extradition bill in early 2019 has also acted as a major headwind for the city state’s economic outlook throughout the year.

Key Trends in Long-Only Absolute Return Funds (July 2020)

July 2020 | Eurekahedge


The Eurekahedge Long-Only Absolute Return Fund Index was down 11.09% as of May 2020 year-to-date, trailing behind with their hedge funds and funds of funds counterparts who loss 2.62% and 3.05% over the same period respectively. In 2019, absolute return funds recorded a 16.31% return as they benefitted from the robust performance of the global equity market on the back of positive geopolitical development and accommodative central bank policies.

Long-Only Absolute Return Funds Infographic July 2020

July 2020 | Eurekahedge


Eurekahedge’s long-only absolute return funds infographic sums up the industry as at July 2020. Find out more about long-only absolute return 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.

Interview with Michael Günther, Portfolio Manager at Tungsten Investment Funds

July 2020 | Eurekahedge


Michael Günther has been a member of the Executive Board of TRYCON G.C.M. AG since 2002 and since 2013 a portfolio manager at Tungsten Capital, an asset management company based in Frankfurt am Main. Since the year 2000, he has dealt with systematic trading strategies and the application of machine learning and artificial intelligence to the financial markets. In the integration of these technologies in investment decisions, he is one of the pioneers in Germany. Michael Guenther, together with Pablo Hess, is responsible for the development of the proprietary portfolio software QuantMatrix, which applies artificial intelligence and machine learning for the trading strategy of the Tungsten TRYCON fund. The multi-asset long / short fund Tungsten TRYCON AI Global Markets, managed by the two, provides investors with access to new data analysis technologies and artificial intelligence and has received several awards.

Interview with Oleksandra Polishchuk, Head of Business Development and Investor Relations of Carlisle Management Company

July 2020 | Eurekahedge


Established in 2008, Carlisle is a leading, highly diversified global investment management firm. Our state-of-the-art facilities and statistical modelling systems incorporate knowledge gained from 60+ years of combined investment experience within the alternative asset sector. Supervised by the Luxembourg regulator and being subject to controls of reputable audit firms at both management company and fund level, we operate independently, which allows us to focus solely on investors call for transparency and performance, within a regulated framework providing accurate management of the risks involved while maximizing investment returns.

Interview with Jesse Liu, Cofounder & CIO of Urania Capital Management

July 2020 | Eurekahedge


Jesse is director, chief investment officer and portfolio manager of Urania Capital Management Ltd. Before co-­-founding Urania Capital Ltd, Jesse has been managing money for friends and families for many years through “managed accounts” consistently outperforming S&P 500 index and generating solid risk­-adjusted returns and high alpha. Jesse developed and refined his unique stock market investment philosophy and methodologies through and combining (1) 30 years of stock market investment study and practice, (2) 30 years of experience in starting and managing businesses in various functional capacities, (3) deep understanding of corporate finances, accounting and business Numbers as chief financial officer of private and public companies, and (4) extensive knowledge and application of Mathematical and statistical models. Jesse holds an MBA from Columbia University and a MS in Engineering from Iowa State University.

Interview with Fabrice Tischhauser, CFA, CEO and Dmitry Sukhanov, Head of Research and Development of Quant Infinity Group

July 2020 | Eurekahedge


Quant Infinity is a data science company that develops algorithmic trading solutions based on Artificial Intelligence (AI) and Machine Learning (ML), specifically for investment funds and asset management companies

Asset Flows Update

June 2020 | Eurekahedge


The Eurekahedge Hedge Fund Index was up 2.03% in May, supported by strong equity market performance as represented by the MSCI ACWI (Local), which gained 4.32%. Global equities ended the month on a positive note driven by market optimism on the reopening of major economies and expansionary central bank policies. The tech-heavy NASDAQ recorded a new all-time high as it gained 6.75% in May, while the S&P 500 was up 4.53% over the same period. In the same vein, European equities also climbed as the French and German governments unveiled a half-trillion recovery fund to help EU countries hit by the pandemic.

Hedge Fund Performance Commentary

June 2020 | Eurekahedge


The Eurekahedge Hedge Fund Index was up 2.03%1 in May, supported by the robust performance of the global equity market as represented by the MSCI ACWI (Local), which gained 4.32% over the same month. Global equities continued its rally driven by the reopening of major economies and accommodative central bank policies. For the week ending May 15, the market saw a decline in risk assets owing to concerns regarding the second pandemic wave and fresh tension between the US and China, pushing the S&P 500 down 2.26%.

Trade finance fund managers outperformed major hedge fund strategies amidst COVID-19 pandemic

June 2020 | Eurekahedge


Trade finance hedge funds have gained traction over recent years, driven by investor demand for alternative asset classes with low volatility and consistent return, as well as low correlation against the broader financial market. The sector began its rapid growth following the global financial crisis in 2008, when banks started reducing their trade finance exposure to meet Basel III capital requirements. To address the lack of a standard benchmark for this niche hedge fund strategy, Eurekahedge launched the industry’s first trade finance hedge fund index in 2018, providing institutional investors with a benchmark index representing the performance of trade finance hedge fund managers.

Key Trends in Funds of Hedge Funds (June 2020)

June 2020 | Eurekahedge


Multi-manager funds were down 5.05% over the first four months of 2020, underperforming their single-manager counterparts who lost 4.59% over the same period. In 2019, the fund of funds industry registered 8.59% return - recording their best annual performance since 2009.

Funds of Hedge Funds Infographic June 2020

June 2020 | Eurekahedge


Eurekahedge’s funds of hedge funds infographic sums up the industry as at June 2020. Find out more about funds of 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.

Interview with Michael Pomada, President & CEO and Lisa Martin, Director of Business Development at Crabel Capital Management, LLC

June 2020 | Eurekahedge


Crabel Capital Management is a global alternative investment firm specializing in systematic, automated trading of global futures and foreign exchange. Our Los Angeles based firm was founded by short-term trading pioneer Toby Crabel and has delivered over 25 years of uncorrelated returns for its institutional clients. The firm has developed a diverse array of trading strategies designed to systematically capture market anomalies implemented through a technologically advanced, low latency infrastructure. Global co-location facilities and proprietary execution algorithms allow the firm to efficiently trade in approximately 200 futures and foreign exchange markets.

Asset Flows Update

May 2020 | Eurekahedge


The Eurekahedge Hedge Fund Index was up 4.03% in April, supported by the strong performance of the global equity market which pushed the MSCI ACWI IMI (Local) up 10.47% over the month. Global equities enjoyed a strong rally throughout the month on the back of optimism over the development of potential COVID-19 vaccines and the reopening of the economy.

Hedge Fund Performance Commentary

May 2020 | Eurekahedge


The Eurekahedge Hedge Fund Index was up 4.03% in April – registering its best month since May 2009, supported by the robust performance of the underlying global equity market as represented by the MSCI ACWI IMI (Local) which gained 10.47% over the month. Global equities recouped some of the losses they suffered in March on the back of market optimism over the development of potential vaccineThe Eurekahedge Hedge Fund Index was up 4.03% in April – registering its best month sis and the reopening of the economy.

Alternative Equity ETF and Hedge Fund Performance Comparison

May 2020 | Eurekahedge


Exchange-traded funds (ETFs) have become an increasingly crucial tool for both institutional and retail investors to gain exposure to certain markets or hedge risks at a low cost in recent years. The explosive growth of the assets managed through ETFs has been largely driven by the increase in popularity of index funds, ETFs designed to track the performance of an index. An index fund could be used by retail investors to passively invest in equity markets, or by fund managers to easily adjust their portfolio exposure towards certain markets.

Key Trends in North American Hedge Funds (May 2020)

May 2020 | Eurekahedge


The Eurekahedge North American Hedge Fund Index was down 9.61% year-to-date as of March 2020, outperforming the underlying equity market as represented by the MSCI North America IMI, which lost 21.40% over the same period. The severity of the COVID-19 outbreak outside Mainland China has forced government authorities to implement lockdown and social distancing measures, resulting in a massive sell-off in the global equity market.

North American Hedge Funds Infographic May 2020

May 2020 | Eurekahedge


Eurekahedge’s North American hedge funds infographic sums up the industry as at May 2020. 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.

Interview with Asim Ghaffar, CIO of AG Capital Investments, LLC

May 2020 | Eurekahedge


Asim founded AG Capital in 2014. He has a background in economics, strategy, and investment consulting, as well as futures trading and risk management. Most recently, he worked as an investment consultant in Cambridge Associates, LLC’s Boston office, where he advised foundations, universities, private clients, and insurance groups in the U.S. ranging in size from $100 million to $20 billion. Prior to joining Cambridge Associates, Asim was a Principal at Partners Capital Investment Group, LLC, an international investment advisory firm. Before that, he was a strategy consultant at Bain & Company, Inc. He began his career as an economics and business consulting analyst at Charles River Associates, Inc

Asset Flows Update

April 2020 | Eurekahedge


The Eurekahedge Hedge Fund Index was down 4.77% in March, outperforming the underlying equity market as represented by the MSCI ACWI IMI (Local), which lost 13.99% over the month. Global equities ended the month with double-digit losses, despite the partial recovery toward the end of the month, driven by fiscal and monetary stimulus packages. The situation surrounding the COVID-19 outbreak continued to worsen around the globe, with the United States overtaking China and Italy as the country with the highest number of confirmed cases. US authorities were forced to implement lockdown in most states adversely affected by the coronavirus outbreak, with New York being the hardest hit.

Hedge Fund Performance Commentary

April 2020 | Eurekahedge


The Eurekahedge Hedge Fund Index was down 4.41% in March, outperforming the underlying equity market as represented by the MSCI ACWI IMI (Local), which lost 13.99% over the month. Global equities were under pressure from the market sell-offs throughout most of the month, before recouping some of their losses later on. The COVID-19 outbreak continued to worsen globally, with the United States overtaking China as the country with the highest number of confirmed cases. US authorities were forced to implement stringent social distancing measures in an attempt to flatten the outbreak curve, resulting in increasing unemployment rate and slowing economic growth as businesses deemed non-essential were forced to temporarily cease their operations.

Hedge Fund Round Up Q1 2020

April 2020 | Eurekahedge


Hedge fund managers ended the first quarter of 2020 down 6.42%, while delivering their strongest post-2008 monthly outperformance over the global equity market as represented by the MSCI ACWI IMI. The escalation of the COVID-19 outbreak, which has spread to more than a hundred countries around the globe over the past two months, has weighed on the performance of risk assets in February and March.

Key Trends in European Hedge Funds (April 2020)

April 2020 | Eurekahedge


The Eurekahedge European Hedge Fund Index was down 2.48% as of February 2020 year-to-date, outperforming the MSCI AC Europe IMI, which lost 9.79% over the same period. In the fourth quarter of 2019, the European equity markets rose higher, supported by the positive geopolitical development surrounding the US-China trade negotiations as the two leading economies reached the phase-one deal, which was signed in January 2020. The DAX and CAC 40 gained 6.61% and 5.29% in Q4 2019, reaching new all-time highs. However, market risk sentiment shifted quickly in February 2020 as the extent of the COVID-19 outbreak outside China resulted in concerns over the global economic growth.

Key Trends in UCITS Hedge Funds (April 2020)

April 2020 | Eurekahedge


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 results in 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.

European Hedge Funds Infographic April 2020

April 2020 | Eurekahedge


Eurekahedge’s European hedge funds infographic sums up the industry as at April 2020. Find out more about European 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.

UCITS Hedge Funds Infographic April 2020

April 2020 | Eurekahedge


Eurekahedge’s UCITS hedge funds infographic sums up the industry as at April 2020. 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.

Interview with Christopher Cole, CFA - Founder & CIO, Artemis Capital Management

April 2020 | Eurekahedge


Christopher R. Cole, CFA, is the Founder & CIO of Artemis Capital Management LP. Mr. Cole’s core focus is systematic, quantitative, and behavioral-based trading of volatility and derivatives. His decision to form a fund came after achieving significant proprietary returns during the 2008 financial crash trading volatility futures and options (verified by an independent auditor).

Asset Flows Update

March 2020 | Eurekahedge


The Eurekahedge Hedge Fund Index was down 1.73% in February, outperforming the underlying equity market as represented by MSCI ACWI (Local) which plummeted 7.84% over the same period. Global equities started the month on a positive note, driven by the market optimism towards the containment of the COVID-19 as the number of newly infected people in Mainland China decelerated and central banks announced stimulus packages.

Hedge Fund Performance Commentary

March 2020 | Eurekahedge


The Eurekahedge Hedge Fund Index was down 1.73% in February, outperforming the underlying global equity market as represented by the MSCI ACWI (Local) which lost 7.84% over the month. Global equities rallied earlier into the month, supported by the improving situation in China over the COVID-19 outbreak and stimulus packages announced by central banks. The tech-heavy NASDAQ Composite recorded a new all-time high for the week ending February 14, as the encouraging macroeconomic data in the region also contributed to its performance during the period.

Tail risk protection: The price of watching over your tail

March 2020 | Eurekahedge


The return of market volatility on the back of the escalating COVID-19 outbreak situation around the globe has pushed two particular niche hedge fund strategies back into the spotlight: the CBOE Eurekahedge Long Volatility Hedge Fund Index and the CBOE Eurekahedge Tail Risk Hedge Fund Index returned 10.27% and 12.28% respectively in February 2020. The two strategies which provide crisis alpha and protection for institutional portfolios have long since generated debates among asset owners and academics alike.

Key Trends in Global Hedge Funds (March 2020)

March 2020 | Eurekahedge


The Eurekahedge Hedge Fund Index was up 0.08% year-to-date as of January 2020, outperforming the underlying global equity market as represented by the MSCI ACWI IMI, which was down 0.89% over the same period. In 2019, the positive development of the US-China trade negotiations and the Fed’s shift of stance on their policy rates were the primary drivers of the global equity market performance.

Global Hedge Funds Infographic March 2020

March 2020 | Eurekahedge


Eurekahedge’s global hedge funds infographic sums up the industry as at March 2020. 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.

Asset Flows Update

February 2020 | Eurekahedge


The Eurekahedge Hedge Fund Index ended 2019 up 8.67%, recording its strongest annual performance since 2013 on the back of the de-escalation of the US-China trade war and accommodative central bank policies. Going into 2020, hedge fund managers returned 0.14% in January, outperforming the MSCI ACWI (Local) which slumped 0.90% over the month following the COVID-19 outbreak in China. Despite liquidity injection by the People’s Bank of China and the reduction of tariffs on US imports, investors remained concerned on the impact of the epidemic on the global economic outlook. Returns were mixed across regions in January, with Asia ex-Japan fund managers returning 0.93%, ahead of their peers focusing on North America, who ended the month down 0.11%. Long/short equities fund managers were down 0.35% in January as the weak equity market performance throughout the latter half of the month weighed on their returns.

Hedge Fund Performance Commentary

February 2020 | Eurekahedge


The Eurekahedge Hedge Fund Index was up 0.14% in January, ahead of the underlying equity market as represented by the MSCI ACWI (Local) which lost 0.90% over the same period. Global equities rallied earlier into the month, supported by the easing tension in the Middle East and the signing of the US-China phase-one trade deal. The S&P 500 and the tech-heavy NASDAQ returned 2.29% and 1.97% respectively for the week ending January 17. However, market sentiment shifted rapidly towards the end of the month, following the coronavirus outbreak in China. Investors feared that the epidemic, which draws parallel to the SARS outbreak in 2003 might have an adverse impact on the global economic outlook.

Continued loss creep from past events curtailed ILS fund performance in 2019

February 2020 | Eurekahedge


The Eurekahedge ILS Advisers Index gained 0.92% in 2019, following two consecutive years of losses during which ILS fund managers with catastrophe risk exposure suffered from the damage caused by the Atlantic hurricane seasons. Despite being a period of calm insurance losses, 2019 saw ILS fund managers languishing under loss creep from upward adjustments in estimated losses of past events. Insurance-linked securities (ILS) hedge funds trade in instruments whose values depend on insurance loss events. The majority of these instruments are reinsurance policies that assume the risk taken by insurance companies, which in turn assume the risk taken by individuals or institutions.

Key Trends in Islamic Hedge Funds (February 2020)

February 2020 | Eurekahedge


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. Islamic financial products are accessible to all investors, some of whom choose to allocate into Islamic funds for purposes of portfolio diversification or their preference in investing in products which deemed as socially responsible. In recent years, Islamic finance has been catching on with traditional finance institutions as international banks have expanded into providing Islamic finance services.

Islamic Hedge Funds Infographic February 2020

February 2020 | Eurekahedge


Eurekahedge’s Islamic hedge funds infographic sums up the industry as at February 2020. Find out more about Islamic 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.

Interview with Dino Skandalis, CEO and CIO of P79 Capital Limited

February 2020 | Eurekahedge


Dino has over 27 years of experience in global trade finance and debt markets both in the banking and investment management sectors. He has served as global head of trade finance related products for Standard Chartered Bank, Standard Bank, and Banco Santander where he managed trading and investment portfolios in the trade finance related sector and market leading origination and trading desks.

Asset Flows Update

January 2020 | Eurekahedge


The Eurekahedge Hedge Fund Index ended 2019 up 8.74%, recording its strongest annual performance since 2013. The global hedge fund industry has been supported by the global equity market rally on the back of the de-escalation of the US-China trade war and accommodative central bank policies. Positive geopolitical developments surrounding the trade war and Brexit have also sustained investors’ risk sentiment over the last quarter of the year. Returns were positive across regions, with Asia ex-Japan fund managers returning 2.58% in December, on the back of the region’s equity market rally. Fund managers focusing on Asia ex-Japan were up 12.03% over the year, outperforming their North American peers who returned 9.32% over the same period.

Hedge Fund Performance Commentary

January 2020 | Eurekahedge


The Eurekahedge Hedge Fund Index was up 1.57% in December and 8.74% for the year, recording its strongest annual return since 2013. The risk-on sentiment resulting from positive geopolitical development provided support for risk assets as the two-leading economies officially reached an agreement that de-escalated their 18-month long trade tension. The global equity market as represented by the MSCI ACWI (Local) ended 2019 up 23.44%. US equities recorded new all-time highs, with the S&P 500 up 2.86% in December on the back of market optimism toward the US-China phase-one deal which was signed in early 2020. Over in Europe, UK equities outperformed their European peers, thanks to the landslide victory of the UK Conservative Party, which resulted in better clarity surrounding Brexit. The FTSE 100 rose 2.67% during the month. On a similar note, positive trade development, monetary stimulus, and strong macroeconomic data acted as a tailwind to the performance of Asian equity markets, especi

Structured credit hedge funds: Staying ‘Sharpe’ in ultra-low rate environment

January 2020 | Eurekahedge


Structured credit traces its history back to the 20th century and has been a part of institutional and hedge fund portfolios for decades. Hedge fund managers focusing on structured credit could largely be dichotomised into those who generate returns from beta exposure to the asset class, and those who exploit mispriced instruments resulting from market inefficiency. Structured credit instruments result from the securitisation process in which multiple debt obligations are packed into interest-bearing securities whose cash flows are then sold to investors. This asset class has remained attractive to investors due to their ability to offer good return potentials and low rate of losses while providing diversification from other fixed income assets. The securitisation process also allows the final product to be tailored to an investor’s specific risk profile and constraints. On the other hand, the complexity of the instrument may result in heightened liquidity risk, and certain structured

Key Trends in Asian Hedge Funds (January 2020)

January 2020 | Eurekahedge


The Eurekahedge Asian Hedge Fund Index was up 7.41% year-to-date as of November 2019, supported by the robust performance of risk assets in the region resulting from the progress of the US-China trade talks. The underlying equity market, as represented by the MSCI AC Asia Pacific IMI gained 15.19% over the same period. The trade negotiation process between the two countries has faced considerable challenges throughout the year, notably when the PBOC allowed the yuan to weaken past the symbolic level of seven. The US Treasury department responded by labelling China as a currency manipulator, further escalating the tension between the two economies. However, market sentiment improved when the trade talks resumed in October, and finally concluded in a phase-one deal which was eventually signed in January 2020, shortly after the removal of China from the US Treasury list of currency manipulators. The positive geopolitical development surrounding the trade war boosted market sentiment and a

Asian Hedge Funds Infographic January 2020

January 2020 | Eurekahedge


Eurekahedge’s Asian hedge funds infographic sums up the industry as at January 2020. 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.

Asset Flows Update

December 2019 | Eurekahedge


The Eurekahedge Hedge Fund Index gained 0.90% in November, bringing its year-to-date return to 7.27%. The global hedge fund industry has been supported by the global equity market rally on the back of optimism over the US-China trade negotiation progress and dovish central bank policies throughout the year. Positive geopolitical developments surrounding the trade war and Brexit have also sustained investors’ risk sentiment over the recent months. Returns were positive across regions, with North American fund managers returning 1.59% in November, on the back of the region’s equity market performance which resulted in a new all-time high for the S&P 500. On a year-to-date basis, fund managers focusing on Asia ex-Japan were up 9.42% over the first 11 months of the year, outperforming their North American peers who returned 7.86% over the same period.

Hedge Fund Performance Commentary

December 2019 | Eurekahedge


The Eurekahedge Hedge Fund Index was up 0.90% in November, supported by the market’s optimism towards the progress of the US-China trade talks. The underlying equity market as represented by the MSCI ACWI (Local) gained 2.76% over the same period. US equity markets recorded new all-time highs during the month, as a result of the strong corporate earnings combined with the positive geopolitical development. European equities also pushed higher as Germany narrowly avoided recession, defying market expectations. The CAC40 and DAX gained 3.06% and 2.87% over the month. Over in Asia, the enactment of the Hong Kong Human Rights and Democracy Act was seen as a possible headwind against the progress of the ongoing US-China trade negotiations, weighing on the region’s risk outlook. Meanwhile, the wait-and-see approach of the Fed and the ECB towards their policies pushed the yields of the sovereign bonds higher during the month, resulting in the weakness of the government bond market.

Hedge Fund Round-Up 2019

December 2019 | Eurekahedge


Hedge fund managers have returned 7.27% as of November 2019 year-to-date, supported by the global equity market recovery throughout the year. Optimism over the progress of the US-China trade talks and accommodative central bank policies since the beginning of the year have acted as tailwinds for the hedge fund industry, resulting in positive performance for most geographic and strategic mandates for the year. The global hedge fund industry AUM currently stands at US$2,272.8 billion, down US$19.5 billion year-to-date as investor redemptions persisted in spite of positive performance-driven growth.

2019 Key Trends in European Hedge Funds

December 2019 | Eurekahedge


The Eurekahedge European Hedge Fund Index was up 5.16% as of October 2019 year-to-date, supported by positive geopolitical developments surrounding Brexit and accommodative ECB policies. The region’s underlying equity market, as represented by the MSCI AC Europe IMI gained 15.79% over the same period. The slowing economic growth in the region remained as the central bank’s primary concern, particularly after Germany’s gross domestic product contracted in Q2 2019, raising concerns over a recession. In response, the ECB enacted a deposit rate cut and restarted their asset purchase programmes in September, which boosted the equity market in the region. The DAX and CAC40 were up 21.86% and 21.12% respectively since the start of the year. The UK market was spooked by PM Boris Johnson’s firm stance towards no-deal Brexit and decision to prorogue the parliament in August, resulting in a 5.00% decline of the FTSE100 over the month. However, the situation has reversed as the PM reached an agree

European Hedge Funds Infographic December 2019

December 2019 | Eurekahedge


Eurekahedge’s European hedge funds infographic sums up the industry as at December 2019. Find out more about European 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.

Interview with Stefan Wattinger, ILS Product Specialist, Credit Suisse Insurance Linked Strategies Ltd

December 2019 | Eurekahedge


Stefan Wattinger is the ILS Product Specialist of Credit Suisse Insurance Linked Strategies Ltd., which manages a number of funds focused on insurance linked investments.

Asset Flows Update

November 2019 | Eurekahedge


The Eurekahedge Hedge Fund Index declined 0.31% in October, trailing the global equity market which edged 1.93% higher over the month, as represented by the MSCI ACWI (Local). Global equities rallied throughout the month, supported by the continuation of the US-China trade talks which culminated in a partial trade agreement between the two countries. The bond market saw yields climb as the risk-on sentiment returned to the equity market and the Fed signalled that they are done with rate cuts for the moment. Returns were positive across regions, with Asia ex-Japan mandate returning 2.36% for the month. On a year-to-date basis, fund managers focusing on Asia ex-Japan were up 9.74% over the first 10 months of the year, outperforming their North American peers who returned 6.26% over the same period.

Hedge Fund Performance Commentary

November 2019 | Eurekahedge


The Eurekahedge Hedge Fund Index was up 0.31% in October, trailing behind the MSCI ACWI (Local), which ended the month up 1.93% over the same period. The resumption of the US-China trade talks resulted in a partial trade agreement between the two largest economies. The positive development prompted President Trump to postpone the scheduled tariff hike on Chinese goods, which boosted US and Asian equities during the month. In the UK, the region’s equity market underperformed their global and EU peers despite the 3-month Brexit extension granted by the EU lawmakers, as a result of the stronger British pound. Government bond yields strengthened over the month, supported by investors’ risk-on sentiment combined with the Fed’s less dovish remark as they signalled a pause in cutting rate for the foreseeable future.

Eurekahedge European Investor Perspectives – Zurich 2019

November 2019 | Eurekahedge


Altinvestor Europe 2019 is Eurekahedge’s third European asset owner forum and the seventh of its kind across Europe and APAC regions, delivering exclusive insights from family offices as well as institutional asset owners on exploring alternative investments and optimizing portfolio returns. The event is aimed at facilitating a private environment for candid discussions between investors and to serve as a melting pot of ideas connecting Europe’s leading institutional investors under one roof.

2019 Key Trends in Latin American Hedge Funds

November 2019 | Eurekahedge


The Eurekahedge Latin American Hedge Fund Index was up 8.54% as of September 2019 year-to-date, narrowly underperforming the MSCI EM Latin America Index, which gained 10.24% over the same period. The market showed optimism following the consecutive rate cuts announced by the country’s central bank, which lifted the region’s equity markets. Investors also reacted positively to the approval of the pension reform in the lower house as the government saw the overhauling of the pension system critical in boosting the economic growth of Latin America’s biggest economy. Meanwhile, the region’s gross domestic product shrank in the first quarter this year for the first time since 2016. The delayed adoption of the pension reform was seen as a key reason for the weaker economic recovery of the country as international businesses were holding back their investment until the promulgation of the said reform. The Bovespa Index was up 19.18% as of September 2019 year-to-date.

2019 Key Trends in Emerging Market Hedge Funds

November 2019 | Eurekahedge


Emerging market mandated hedge funds were up 6.33% year-to-date, recovering the losses they suffered in 2018 on the back of the accommodative stance of the Fed and the market optimism towards the US-China trade negotiations, which boosted the equity markets of the developing economies over the year. During the first quarter of the year, the Federal Reserve completely shifted their stance from restrictive to accommodative monetary policy following the multiple equity markets sell-offs in 2018 and strong criticisms from the US President. Meanwhile, the market showed optimism towards the US-China trade talks as the two economic powerhouses agreed to resume the negotiations after the US President decided to postpone additional tariffs on the remaining US$300 billion of Chinese imported goods in August. The Shenzhen and Shanghai Composites were up 25.82% and 16.49% as of September year-to-date respectively. Over in India, the region is facing challenges surrounding liquidity risk owing to t

Latin American Hedge Funds Infographic November 2019

November 2019 | Eurekahedge


Eurekahedge’s Latin American hedge funds infographic sums up the industry as at November 2019. Find out more about Latin 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.

Interview with Tom James CEO & CIO, John Collis CLO of Tradeflow Capital Management

November 2019 | Eurekahedge


Tom James is CIO & CEO and a co-founder of the CEMP - NR Capital Trade Flow Fund SP (the Fund), the innovative digitised trade finance solution for bulk physical commodity transactions being shipped or stored around the world. He is widely recognised as a leading practitioner in the global natural resources market with over 30 years of commercial exposure gained through broad ranging senior regulated roles in financial institutions (including Bank of Tokyo Mitsubishi UFJ, Credit Agricole and Credit Lyonnais) and various trading firms including BHP Billiton. John Collis is a co-founder of the Fund and holds the position of Chief Legal Officer (CLO) and Head of Compliance. As well overseeing the development of the Fund’s critical legal infrastructure and working with leading Counsel on its enforceability, John has overseen the classification of the specialist intellectual property developed and acquired by TradeFlow and its licensing; and has worked with insurance underwriters

Asset Flows Update

October 2019 | Eurekahedge


The Eurekahedge Hedge Fund Index declined 0.30% in September, trailing the global equity market which edged 2.04% higher over the month, as represented by the MSCI ACWI (Local). Global equities rallied through the earlier half of the month, supported by the resumption of the US-China trade talks, only to retreat toward the end of the month as an impeachment inquiry was launched against the US President. The bond market saw yields decline as major central banks continued with their easing policies: the Fed cut its rate for the second time this year in September, and the ECB announced new stimulus packages, including the restart of their asset purchases. Returns were mostly positive across regions, with the exception of fund managers focusing on Europe, who were down 0.10% in September. Nonetheless, the mandate is still up 3.75% on a year-to-date basis. Japan-focused hedge funds were up 1.26% throughout the month, outperforming their Asia ex-Japan peers who were up 0.97%.

Hedge Fund Performance Commentary

October 2019 | Eurekahedge


The Eurekahedge Hedge Fund Index was down 0.30% in September, underperforming the MSCI ACWI (Local), which ended the month up 2.04%. The resumption of the US-China trade negotiations combined with the withdrawal of the controversial Hong Kong extradition bill boosted the two regions’ equity markets early into the month. However, the impeachment inquiry against the US President Donald Trump wiped out a portion of the gains posted by US equities, dragging the S&P 500 down 1.01% through the week ending 27 September. Despite the improving risk sentiment among investors throughout the month, the global bond markets saw yields decline due to the accommodative stance adopted by the major central banks. The ECB announced new stimulus measures, including the resumption of asset purchases, while the Fed decided to cut its rate for the second time this year in September. The commodity market saw a sharp increase in oil prices during the month following the drone attack on Aramco oil facilities,

Hong Kong: A turning point for the number one Asian hedge fund hub

October 2019 | Eurekahedge


Hong Kong has been a major focal point within the Asia Pacific hedge fund industry, currently accounting for US$92.1 billion of assets under management (AUM), overseen by 449 hedge fund managers as of August 2019. Proximity to the fast-growing economy of China, availability of highly-trained talent base, as well as robust regulatory landscape have successfully attracted both foreign and domestic hedge fund managers to base their operations in the special administrative region. The Hong Kong hedge fund industry has continued to grow and reach new highs on the back of robust investor allocations and performance-driven growth in the post-GFC era. Seen as the gateway to China, Hong Kong is uniquely positioned to benefit from foreign asset owners interested in allocating into the Greater China region, as well as domestic asset owners looking to gain international exposure.

2019 Key Trends in North American Hedge Funds

October 2019 | Eurekahedge


The Eurekahedge North American Hedge Fund Index was up 5.71% year-to-date as of August 2019, underperforming the underlying equity market as represented by the MSCI North America IMI, which gained 16.47% over the same period. The progress of the US-China trade negotiations combined with the exhibited accommodative stance of the Fed acted as tailwinds for North American hedge fund managers, resulting in Q1 return of 5.22% - the strongest since 2006. The positive developments of the US-China trade talks prompted President Trump to delay the scheduled tariff increase in March, which further uplifted the risk sentiment among investors during the first few months of the year. However, the robust rally in the equity market ended in May, following President Trump’s decision to increase the tariffs imposed on the Chinese imported goods resulting in the breakdown of their trade negotiation. Over the same month, President Trump blacklisted Huawei due to national security concerns. The tech-heavy

North American Hedge Funds Infographic October 2019

October 2019 | Eurekahedge


Eurekahedge’s North American hedge funds infographic sums up the industry as at October 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.

Asset Flows Update

September 2019 | Eurekahedge


The Eurekahedge Hedge Fund Index gained 0.17% in August, outperforming the global equity market which slumped 2.37% over the month, as represented by the MSCI ACWI (Local). The re-escalation of the US-China trade war combined with other political concerns resulted in weak global equity performance during the month. Despite the ongoing trade talks, the US imposed additional tariffs to US$300 billion of Chinese imported goods. The move prompted China to levy retaliatory tariffs to US imported goods, which rattled the world’s financial markets. Meanwhile, the deteriorating bilateral relationship between Japan and South Korea, the ongoing protests in Hong Kong, and the heightened risk of a no-deal Brexit also contributed to the risk-off sentiment among investors. Fund managers focusing on North America and Asia ex-Japan were down 0.78% and 0.96% respectively in August. Nonetheless, the two mandates are still up 6.04% and 6.83% respectively on a year-to-date basis, owing to their strong per

Hedge Fund Performance Commentary

September 2019 | Eurekahedge


The Eurekahedge Hedge Fund Index was up 0.17% in August, outperforming the MSCI ACWI (Local) which ended the month down 2.37%. The US administration imposed additional tariffs to the remaining US$300 billion of Chinese imported goods, which resulted in the weakening of the CNY past the symbolic 7 per USD level early into the month. Consequently, the US Treasury Department labelled China as a currency manipulator, further intensifying the trade tension between the two countries. The risk-off sentiment among investors during the month was mostly driven by political concerns encompassing the US-China trade war, the deteriorating bilateral relationship between Japan and South Korea, the ongoing protests in Hong Kong, and the risk of a no-deal Brexit among other things. Further exacerbating the risk-off sentiment during the month, the US 2-10Y yield spread inverted for the first time since 2007, raising concerns over an impending economic recession.

ESG Fund Investing: The pursuit of sustainable alpha

September 2019 | Eurekahedge


Investors are increasingly beginning to incorporate ethical considerations into their investment decisions, a development which has given rise to the ESG framework over the years. Despite the implementation challenges which arise when screening investments against acceptable environmental, social and corporate governance themes, the trend towards a more conscientious approach to investment is here to stay, especially from the perspective of large institutional investors. Fund managers, for both actively and passively managed investment vehicles are balancing their quest for superior returns with the need to meet investor demand for responsible investing. Further, an understanding that such an approach to investment can translate into ‘ESG-induced alpha’ for managers is further helping the cause of ethically guided investing. This article looks at the performance of funds, both long-only absolute return vehicles and hedge funds, with an active ESG investment framework and how they have

2019 Key Trends in Asian Hedge Funds

September 2019 | Eurekahedge


The Eurekahedge Asian Hedge Fund Index was up 6.06% year-to-date as of July 2019, despite several political uncertainties that plagued the region. The underlying equity market as represented by the MSCI AC Asia Pacific IMI gained 7.79% over the same period. Investors’ optimism towards the US-China trade talks combined with central bank rate cuts and the Chinese stimulus program boosted the region’s equity market resulting in strong Q1 performance of Asian hedge funds. However, the risk-sentiment had shifted entirely in May following the decision of the US administration to increase the tariff to the US$200 billion of Chinese imported goods. The move prompted the Chinese government to retaliate, which resulted in the escalation of their trade conflict. The Shenzhen and Shanghai Composite Index lost 6.40% and 5.84% in May, respectively.

Asian Hedge Funds Infographic September 2019

September 2019 | Eurekahedge


Eurekahedge’s Asian hedge funds infographic sums up the industry as at September 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.

Asset Flows Update

August 2019 | Eurekahedge


The Eurekahedge Hedge Fund Index gained 0.62% in July, with positive returns across geographic mandates. Investor optimism towards the resumption of the US-China trade talks combined with the Fed’s anticipated rate cut boosted the US equity market to a new all-time high. Meanwhile in Asia, Asia ex-Japan hedge funds managed to record positive returns of 0.73% over the month. Despite the ongoing protests in Hong Kong and the trade dispute between Japan and South Korea, Asia ex-Japan hedge funds outperformed their North American peers who gained 0.32% over the same period. Roughly 33.7% of the hedge fund managers tracked by the Eurekahedge Global Hedge Fund Database were able to generate positive returns during the month.

Hedge Fund Performance Commentary

August 2019 | Eurekahedge


The Eurekahedge Hedge Fund Index was up 0.62% in July, supported by gains in developed market equities and bonds over the month. The MSCI ACWI (Local) ended the month up 0.83% with US equities outperforming other markets. The anticipated rate cut from the Federal Reserve combined with the resumption of the US-China trade talks after the breakdown in May boosted the US equity markets and pushed Wall Street’s three major stock indices to new all-time highs during the month. On the other hand, the trade dispute between Japan and South Korea, together with lacklustre economic data in India pushed Asian equities lower. Returns were positive across geographic mandates in July, with North American fund managers gaining 0.32% and Asia ex-Japan fund managers up 0.73%. Fund managers utilising equity long-bias strategies gained 0.62% throughout the month, pushing their year-to-date return to 11.65%.

Trade finance hedge funds maintained their winning edge throughout the trade war

August 2019 | Eurekahedge


Trade finance hedge funds have gained traction over recent years, driven by investor demand for alternative asset classes with low volatility and consistent return, as well as low correlation against the broader financial market. The sector began its rapid growth following the global financial crisis in 2008, when banks started reducing their trade finance exposure to meet Basel III capital requirements. To address the lack of a standard benchmark for this niche hedge fund strategy, Eurekahedge launched the industry’s first trade finance hedge fund index in 2018, providing institutional investors with a benchmark index representing the performance of trade finance hedge fund managers.

2019 Key Trends in Global Hedge Funds

August 2019 | Eurekahedge


The Eurekahedge Hedge Fund Index was up 5.80% year-to-date, trailing the underlying equity market as represented by the MSCI ACWI IMI which was up 14.44% over the same period. The trade optimism resulting from the trade truce between the US and China, combined with the complete shift of the Federal Reserve’s stance on rates supported global equities over the first four months of the year. However, the trade negotiation between the world’s two largest economies collapsed in May, and the Trump administration increased tariffs on US$200 billion of Chinese imported goods, prompting the Chinese government to do the same.

Global Hedge Funds Infographic August 2019

August 2019 | Eurekahedge


Eurekahedge’s global hedge funds infographic sums up the industry as at August 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.

Interview with Dr. Peng She, Co-Founder and CIO of Golden Pine Asset Management

August 2019 | Eurekahedge


Dr. Peng She is the co-founder and CIO of Golden Pine Capital. He graduated from Tsinghua University in Beijing with Bachelor, Master and PhD degrees. In June 2016, he established Golden Pine Capital, the investment manager of Golden Pine Fund. In 2011, he joined Greenwoods Asset Management. He was senior analyst of cyclicals and utilities. He was also directly involved in portfolio management, able to earn rich experience in both domestic and offshore market. From 2006 to 2011, he worked for BASF and Dow Chemical Company, world's top two chemical companies. He was responsible for all the external innovation and technology cooperation in the Greater China District.

Asset Flows Update

July 2019 | Eurekahedge


The Eurekahedge Hedge Fund Index gained 1.83% in June, recouping the losses it suffered back in May as the global equity markets recovered during the month. Investor optimism over the progress of US-China trade talks, coupled with growing expectations of a Fed rate cut supported equity markets around the globe, with the MSCI AC World Index rallying 5.41% in June. Roughly 78.2% of the hedge fund managers tracked by the Eurekahedge Global Hedge Fund Database were able to generate positive returns amidst the risk-on environment during the month. On a year-to-date basis, hedge fund managers have returned 5.84%, recording their strongest 1H performance since 2009.

Hedge Fund Performance Commentary

July 2019 | Eurekahedge


The Eurekahedge Hedge Fund Index was up 1.83% in June, recording its strongest first half return of 5.84% since 2009. Hedge fund managers benefited from strong equity market performance on the back of optimism over the progress of US-China trade talks and the growing expectation of a rate cut of the Federal Reserve over the month. The global equity market as represented by MSCI ACWI (Local) gained 5.41% during the month. The expected meeting of the US President Donald Trump and his Chinese counterpart Xi Jinping during their G-20 summit in Osaka renewed investor optimism on the resolution of the trade conflict which has plagued the market since last year. Meanwhile, weak economic data combined with rising concerns of a global economic slowdown prompted the Federal Reserve to reassess their stance. The expectations that the Fed will soon cut rates resulted in declining bond yields throughout the month, with the US 10-year bond yield dipping to its lowest level since November 2016.

Hedge Fund Fees Overview 2019

July 2019 | Eurekahedge


The global hedge fund industry has witnessed a trend of declining management and performance fees over the past decade, calling into question the traditional “2 and 20” fee structure the industry was famous for. Mediocre returns over recent years – as opposed to the double-digit annual returns investors had come to expect from hedge funds pre-2008, along with increasing competition within the industry and tighter regulation over alternative investment vehicles are some key factors which have contributed to this trend. Investor experience during the 2008 global financial crisis had resulted in more disintermediation within the industry, with institutional investors engaging hedge fund managers directly.

2019 Key Trends in European Hedge Funds

July 2019 | Eurekahedge


The Eurekahedge European Hedge Fund Index was up 2.96% year-to-date as of May 2019, trailing behind the region’s underlying equity market as represented by the MSCI AC Europe IMI which gained 8.92% over the same period. In 2018, European hedge fund managers posted losses under the combined onslaught of Brexit negotiation uncertainties, the Italian debt crisis and the escalation of the US-China trade war.

European Hedge Funds Infographic July 2019

July 2019 | Eurekahedge


Eurekahedge’s European hedge funds infographic sums up the industry as at July 2019. Find out more about European 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.

2019 Key Trends in Long-Only Absolute Return Funds

July 2019 | Eurekahedge


The Eurekahedge Long-Only Absolute Return Fund Index was up 6.96% as of May 2019 year-to-date, recouping some of the losses suffered by absolute return fund managers in 2018. Over the first five months of 2019, absolute return funds have outperformed funds of hedge funds and hedge funds which returned 4.39% and 3.90% respectively, as they benefited from the equity market rally which resulted from accommodative central bank policies and robust Q1 economic data. Optimism over the progress of the US-China trade talks and dovish stance exhibited by major central banks pushed the global equity market since the beginning of the year, as seen from the 8.53% year-to-date return posted by the MSCI ACWI IMI (Local).

Interview with Dr. Peng She, Co-Founder & CIO of Golden Pine Asset Management

July 2019 | Eurekahedge


Dr. Peng She is the co-founder and CIO of Golden Pine Capital. He graduated from Tsinghua University in Beijing with Bachelor, Master and PhD degrees. In May 2016, he established Golden Pine Capital, the investment manager of Golden Pine Fund. In 2011, he joined Greenwoods Asset Management. He was senior analyst of cyclicals and utilities. He was also directly involved in portfolio management, able to earn rich experience in both domestic and offshore market. From 2006 to 2011, he worked for BASF and Dow Chemical Company, world's top 2 chemical companies. He was responsible for all the external innovation and technology cooperation in the Greater China District.

Asset Flows Update

June 2019 | Eurekahedge


The Eurekahedge Hedge Fund Index slumped 0.71% in May, recording its first monthly decline in 2019 after posting four consecutive positive months. On a year-to-date basis, hedge fund managers are still up 4.32%, supported by the recovery in global equity and bond markets in the first quarter. The return of the US-China trade tension during the month of May weighed on the global economic outlook, resulting in the weak performance of global equities. The MSCI AC World Index plummeted 6.12% in May, as investors were unnerved by the escalating trade disputes. On the other hand, global government bonds saw gains as yields fell on the back of expectations that the Fed will soon cut rates in response to weak economic outlook.

Hedge Fund Performance Commentary

June 2019 | Eurekahedge


The Eurekahedge Hedge Fund Index was down 0.71% in May , following four consecutive positive months since the beginning of the year. Hedge fund managers struggled to generate returns amidst the risk-off environment resulting from the re-escalation of the US-China trade war. The Trump administration’s decision to raise tariffs on Chinese imports prompted the other side to launch retaliatory tariffs, leading to worsening global economic outlook which weighed on global equities during the month. The MSCI ACWI (Local) ended the month down 6.12%. On the other hand, the US 10-year treasury yield dipped to its lowest point in almost two years, as investors expect that the Fed will have to cut interest rates in near future. On a year-to-date basis, hedge fund managers are still up 4.32% as of May 2019.

Eurekahedge Global Hedge Fund Awards 2019 Profile

June 2019 | Eurekahedge


The Eurekahedge Global Hedge Fund Awards have been launched with the intent of identifying and celebrating the very best of hedge fund managers in the Americas, Europe, Middle East & Africa (EMEA) and Asia Pacific (APAC) across 45 award categories carefully designed to track key strategic and regional mandates within the global hedge funds industry. In addition to this, we have introduced specialised awards that recognise the performance of new entrants to the industry as well as ‘consistency awards’ for established players that have continued to add value for institutional investors over the years. As a first for the hedge fund industry, the funds are evaluated over the same time period under consideration for all regional awards (Americas, EMEA and APAC) using a consistent methodology that draws on the expertise of our judges who have extensive years of experience allocating institutional money to hedge funds across the globe.

Interview with Sid Klein, Founder & CIO at Global Alternative Investments

June 2019 | Eurekahedge


Mr. Klein is Founder and CIO of Global Alternative Investments (GAI). His 37 years of experience began as a stockbroker working at local and multi-national firms, where he developed his knowledge in the US, Japanese and Chinese equity markets, along with a matching proficiency in precious metals and major currencies, all with an accompanying expertise in derivatives. His comprehensive methodology includes in-depth technical, quantitative, fundamental and valuation analyses. Over a multi-decade period, Sid has identified multiple historic turning points in the major markets and asset classes, often within days. He has appeared in the popular print and TV media since the nineties, while also sharing his commentaries on specialised websites.

New NFA Proficiency Requirements for Hedge Fund Managers

June 2019 | Brian T. Daly and Joshua B. Wright - Schulte Roth & Zabel LLP


The National Futures Association, the self-regulatory organisation for the commodity futures and swaps industry, recently updated its rules to impose “swaps proficiency requirements” on associated persons of NFA members that engage in swaps-related activities. These requirements are likely to be applicable to a significant number of hedge fund advisers (i.e., advisers that are, or are required to be, registered with the Commodity Futures Trading Commission and to be NFA members). While most private equity sponsors are not likely to fall within the scope of any NFA licensing requirement, they should take this opportunity to confirm that the basis for any exemption remains valid.

Asset Flows Update

May 2019 | Eurekahedge


The Eurekahedge Hedge Fund Index was up 1.06% in April, recording its fourth consecutive positive month of 2019. On a year-to-date basis, the index was up 5.15%, supported by the recovery in global equity and bond markets since the beginning of the year. Promising economic data, dovish central banks and optimism over the US-China trade talks over the first quarter helped fund managers recover from the losses they suffered last year. The MSCI AC World Index rallied 3.38% in April, supported by robust labour market data and strong earnings in the US. Despite ongoing concerns over slowing growth, China’s economy expansion over the first quarter beat estimates, supporting the region’s equity markets. However, the positive results led to unease among investors as the PBOC may decide to scale back their policy support. The majority of hedge fund managers tracked by Eurekahedge ended the month of April up, with those focusing on North America and Japan outperforming their peers. Investor all

Hedge Fund Performance Commentary

May 2019 | Eurekahedge


The Eurekahedge Hedge Fund Index gained 1.06% in April, after recording one of its strongest Q1 returns post-crisis. Hedge fund managers have recorded four consecutive months of positive performance since the beginning of 2019, supported by strength in the global equity and bond markets which resulted from encouraging economic data and accommodating central bank policies. On a year-to-date basis, hedge fund managers are up 5.15% as of April 2019. Positive earnings surprises helped renew investors’ optimism in the global equity market, which rallied 3.38% during the month as represented by the MSCI ACWI (Local). Optimism over the progress of the US-China trade talks helped bolster the equity markets around the globe over the first four months of the year, counterbalancing concerns over economic growth slowdown. However, recent development of the US-China negotiations pointed towards another escalation of the trade tension, with the US president announcing more tariffs in early May.

Eurekahedge Asian Investor Perspectives – Hong Kong 2019

May 2019 | Eurekahedge


Altinvestor APAC 2019 is Eurekahedge’s fourth Asian asset owner event and the sixth of its kind across Europe and APAC, delivering exclusive insights from family offices as well as institutional asset owners on exploring alternative assets and optimising portfolio returns. The event is aimed at facilitating a private environment for candid discussions between investors and to serve as a melting pot of ideas connecting Asia’s leading institutional investors under one roof. The first day of the event was geared towards large asset owners such as pension funds, while the second day focused on single and multi-family offices.

2019 Key Trends in Latin American Hedge Funds

May 2019 | Eurekahedge


The Eurekahedge Latin American Hedge Fund Index was up 3.82% as of March 2019 year-to-date, in contrast to the 6.74% gain posted by the MSCI EM Latin America IMI over the same period. The region’s equity markets proved rather resilient throughout the fourth quarter of 2018, which saw the global equity market slumping in the face of the US-China trade war and concerns over economic slowdown. Brazil’s equity market reacted positively to the election of President Jair Bolsonaro, which improved the country’s economic outlook following the dip in mid-2018. Political uncertainties and social unrest continued to plague the region, and together with Argentina’s currency crisis and Venezuela’s economic collapse pushed Latin America’s risk outlook downward. A number of Latin American currencies also depreciated against the US dollar, and in some cases the depreciation led to rising inflation levels.

Latin American Hedge Funds Infographic May 2019

May 2019 | Eurekahedge


Eurekahedge’s Latin American hedge funds infographic sums up the industry as at May 2019. Find out more about Latin 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.

Asset Flows Update

April 2019 | Eurekahedge


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.

Hedge Fund Performance Commentary

April 2019 | Eurekahedge


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.

Not all hedge funds are created equal: The hidden gems of the Asia Pacific hedge fund industry

April 2019 | Eurekahedge


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.

2019 Key Trends in Asian Hedge Funds

April 2019 | Eurekahedge


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.

Asian Hedge Funds Infographic April 2019

April 2019 | Eurekahedge


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.

2019 Key Trends in Global Hedge Funds

April 2019 | Eurekahedge


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.

Global Hedge Funds Infographic April 2019

April 2019 | Eurekahedge


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.

Asset Flows Update

March 2019 | Eurekahedge


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.

Hedge Fund Performance Commentary

March 2019 | Eurekahedge


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: Is the bumpy ride over?

March 2019 | Eurekahedge


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.

2018 Overview: Key Trends in North American Hedge Funds

March 2019 | Eurekahedge


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.

North American Hedge Funds Infographic March 2019

March 2019 | Eurekahedge


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.

Interview with Eduardo Finkler and Jorge Finkler, Portfolio Managers at FK Capital Fund

March 2019 | Eurekahedge


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.

Hedge Funds in Guernsey

March 2019 | Andrew Boyce, Annette Alexander and Christopher Anderson - Carey Olsen


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.

Asset Flows Update

February 2019 | Eurekahedge


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.

Hedge Fund Performance Commentary

February 2019 | Eurekahedge


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 case of funds of hedge funds: extra cost vs. diversification

February 2019 | Eurekahedge


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.

2019 Key Trends in UCITS Hedge Funds

February 2019 | Eurekahedge


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.

2018 Overview: Key Trends in Islamic Hedge Funds

February 2019 | Eurekahedge


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.

UCITS Hedge Funds Infographic February 2019

February 2019 | Eurekahedge


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.

How SEC's List of Examination Priorities for 2019 Will Affect Private Fund Advisers

February 2019 | Michael R. Butowsky and Emily O. Harris - Jones Day


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.

Asset Flows Update

January 2019 | Eurekahedge


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.

Hedge Fund Performance Commentary

January 2019 | Eurekahedge


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.

Robust investor allocations toward ILS funds despite weak 2018

January 2019 | Eurekahedge


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.

2018 Overview: Key Trends in Global Hedge Funds

January 2019 | Eurekahedge


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 <em>Eurekahedge Hedge Fund Index</em> 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.

Global Hedge Funds Infographic January 2019

January 2019 | Eurekahedge


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.

Interview with Dr. Matthew Swann, Principal of Hiscox Re Insurance Linked Strategies Ltd

January 2019 | Eurekahedge


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.

Asset Flows Update

December 2018 | Eurekahedge


The Eurekahedge Hedge Fund Index was down 0.14% in November while underlying markets as represented by the MSCI World Index edged 1.11% higher during the month as equity markets recovered from the decline in October. Dovish tone from the Fed chair raised expectations of a more gradual rate hike pace, providing a tailwind for equity markets around the globe. Positive anticipation over a potential truce between Trump and Xi during the G20 summit has also helped improve market sentiment throughout the latter half of the month.

Hedge Fund Performance Commentary

December 2018 | Eurekahedge


The Eurekahedge Hedge Fund Index ended the month of November down 0.14%, dragging its year-to-date decline to 2.36%. Hedge fund managers struggled to position themselves to capture the upward movement in the equity markets as they recovered from the slump in October. Throughout the month, only 24.3% of the hedge fund managers tracked by the <em>Eurekahedge Hedge Fund Index</em> were able to outperform the global equity market, as represented by the MSCI AC World Index (Local) which gained 1.11% in November.

Hedge Fund Round Up 2018

December 2018 | Eurekahedge


The year 2018 has not been very friendly toward the hedge fund industry in general, with the Eurekahedge Hedge Fund Index down 2.36% year-to-date, in contrast to how it returned 8.51% last year. The return of market volatility, combined with the escalation of the US-China trade war around the middle of the year, as well as the political uncertainties surrounding Brexit negotiation and Italy’s debt level have exerted significant pressure on the hedge fund industry.

2018 Overview: Key Trends in European Hedge Funds

December 2018 | Eurekahedge


The Eurekahedge European Hedge Fund Index slumped 2.08% as of October 2018 year-to-date, ahead of the underlying equity market as represented by MSCI AC Europe IMI (Local) which declined 7.19% over the same period. The region’s equity markets have suffered from the pressure exerted by various political concerns in Italy and the United Kingdom. Unrealistic election promises by the Italian government led to a 2019 budgetary plan which was contradictory to their pledge of cutting down their debt, prompting criticism at Brussels.

European Hedge Funds Infographic December 2018

December 2018 | Eurekahedge


Eurekahedge’s European hedge funds infographic sums up the industry as at December 2018. Find out more about European 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.

Asset Flows Update

November 2018 | Eurekahedge


The Eurekahedge Hedge Fund Index was down 2.27% in October while underlying markets as represented by the MSCI World Index declined 7.33% over the same period. Concerns over rising interest rates in the US coupled with the prospects of political indecisiveness and turmoil in Washington following the Democrat’s House win saw US markets trade lower and give back their gains for the year.

Hedge Fund Performance Commentary

November 2018 | Eurekahedge


The Eurekahedge Hedge Fund Index declined 2.27%, throughout the volatile month of October, dragging its year-to-date decline to 2.15% in what turned out to be the worst month for the global hedge fund industry since 2011. Despite the carnage in the global equity markets, the majority of the hedge fund managers tracked by Eurekahedge outperformed the underlying market as represented by the MSCI ACWI AC (Local), which slumped 7.33% during the month.

The bright stars of the hedge fund industry: what the mainstream media missed out

November 2018 | Eurekahedge


The year 2018 might not have been the best year for the hedge fund industry, with the return of market volatilities in the first quarter and the immediately following global trade friction between the world’s two strongest economies. The equal-weighted Eurekahedge Hedge Fund Index was up 0.12% as of September 2018 year-to-date, as fund managers struggled to generate profits amidst the volatile market and difficult trading situation throughout the year. The industry has also seen multiple liquidations of high-profile hedge funds overseeing billions of dollars of assets, as they were incapable of generating returns beyond what the fund managers and investors deem acceptable.

2018 Overview: Key Trends in Latin American Hedge Funds

November 2018 | Eurekahedge


The Eurekahedge Latin American Hedge Fund Index was up 2.14% as of September 2018 year-to-date, ahead of the MSCI EM Latin America IMI Index which declined 0.19% over the same period. The markets showed optimism on the outcome of the recent Brazilian election, as it entails the economic policy framework for the next four years. Brazil’s economy is currently undergoing an economic recovery from its deep recession between 2014 and 2016, which was caused by declining commodity prices and political concerns. As a result, Brazil was the only geographic mandate in the region that were in the positive territory, gaining 3.70% year-to-date.

2018 Overview: Key Trends in Emerging Market Hedge Funds

November 2018 | Eurekahedge


Emerging market mandated hedge funds were down 3.96% year-to-date, as they struggled to mitigate the losses suffered from underlying equity markets, as represented by the 5.27% loss posted by the MSCI Emerging Market IMI Index (Local). The Eurekahedge Emerging Markets Hedge Fund Index was down in seven months throughout the first three quarters of 2018, marking it as one of the worst years for emerging market hedge funds since 2011.

Latin American Hedge Funds Infographic November 2018

November 2018 | Eurekahedge


Eurekahedge’s Latin American hedge funds infographic sums up the industry as at November 2018. Find out more about Latin 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.

What is a Hedge Fund?

October 2018 | Eurekahedge


Hedge funds are investment vehicles that explicitly pursue absolute returns on their underlying investments. what does “hedge” mean? Are all hedge funds hedged? What are the definitions of the hedge fund investment strategies? Understand these hedge fund fundamentals to help to knock open the door of the hedge fund industry. On this page, we focus on explaining hedge fund basics. Interested in knowing more about hedge fund investment and how Eurekahedge hedge fund databases and services can help the investors or fund managers?

Asset Flows Update

October 2018 | Eurekahedge


The Eurekahedge Hedge Fund Index was down 0.06% in September while underlying markets as represented by the MSCI World Index gained 0.07% over the same period. Asia focused strategies saw yet another month of decline as recovery in the US coupled with concerns over the US China trade war kept the pressure up on Asian markets with underlying Greater China mandates suffering steep losses. Across strategies, distressed debt, fixed income and arbitrage hedge funds led the table with gains of 1.84%, 0.70% and 0.29% respectively.

Hedge Fund Performance Commentary

October 2018 | Eurekahedge


The Eurekahedge Hedge Fund Index ended the month down 0.06%, trailing closely behind global equity markets as represented by the MSCI AC World Index (Local) which edged 0.07% higher in September. Roughly half of the hedge fund managers tracked by Eurekahedge managed to generate positive returns over the month. On a year-to-date basis, the Eurekahedge Hedge Fund Index was up 0.26% as of September 2018, with 11% of the constituent funds generating double-digit returns over the first three quarters of the year

European Investor Perspectives – Geneva 2018

October 2018 | Eurekahedge


Altinvestor Europe 2018 is Eurekahedge’s second European asset owners’ event and the fourth of its kind across Europe and APAC regions, delivering exclusive insights from family offices as well as institutional asset owners on exploring alternative assets and optimising portfolio returns. The event is aimed at facilitating a private environment for candid discussions between investors and to serve as a melting pot of ideas connecting Europe’s leading institutional investors under one roof.

2018 Key Trends in North American Hedge Funds

October 2018 | Eurekahedge


North American hedge funds were up 3.39% as of August 2018 year-to-date, outperforming their peers focusing on other regions, owing to the robust economy of the United States which was supported by the Trump administration’s tax cut policy. The strong economy led the Federal Reserve to tighten their monetary policy by gradually increasing their short-term interest rates to contain the low unemployment rate, stabilise inflation, and avoid overheating the economy. The rate hikes made the US bond market attractive to investors due to the rising bond yields, causing a massive equity market selloff in early February this year. The North American equity markets have since recovered, boosted by strong corporate earnings season, which saw more than 80% of the large-cap companies comprising the S&P 500 index beating Q2 analyst estimates.

North American Hedge Funds Infographic October 2018

October 2018 | Eurekahedge


Eurekahedge’s North American hedge funds infographic sums up the industry as at October 2018. 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.

Interview with Alain Groshens, CEO at SystematicEdge

October 2018 | Eurekahedge


Alain Groshens is the co-founder, CEO, Head of Portfolio Management and Responsible Officer at SystematicEdge. For the past 25 years, Alain has been directly in charge of multi-asset portfolio management and head of trading divisions for major European Investment Banks (Societe Generale, Commerzbank & Natixis), accountable for generating returns and managing risks. As Global Head of Trading, Alain was in charge of 50 traders across the globe, managing multi-asset portfolios totaling up to 30 billion euros of notional. Alain spent most of his career in Asia and was based in Paris, London, Tokyo and Hong Kong.

Brexit Update: UK Provides More Details on its Proposed Temporary Permissions Regime

October 2018 | John Verwey and Amar Unadkat, Proskauer Rose LLP


On 29 March 2019, the UK is set to leave the EU (a process most commonly referred to as "Brexit"). The UK and EU are currently in negotiations to agree upon a transitional period which is proposed to run from 29 March 2019 through to 31 December 2020. Under the terms of the proposed transitional agreement, the UK would continue to be treated as part of the EU's single market in financial services, meaning that UK and EU firms would continue to have access to their respective markets on current terms and firms will be able to trade on the same terms as now until the end of the transitional period. Financial services passporting rights would continue to apply, therefore EU firms operating in the UK, and UK firms operating in the EU, would be able to continue to undertake regulated investment activities, either by means of passporting rights or under other relevant EU frameworks.

Guide to Opportunity Zones: How Taxpayers Can Achieve Capital Gains Tax Benefits and Support Enterprise in Underserved Communities

October 2018 | Pamela V. Rothenberg and Mark Newberg, Womble Bond Dickison LLP


Opportunity Zones are a compelling and powerful new tool for investors, asset owners, asset managers and communities that can mobilise capital for economic development in underserved communities, yielding good job creation, affordable and workforce housing development, community improvement and economic growth.

Luxembourg investment fund managers: regulatory clarifications as to approval and organisation requirements

October 2018 | Laure Mersch, Marc Meyers, Max Welbes and Thibaut Partsch, Loyens & Loeff


The CSSF issued on 23 August 2018 a new circular 18/698 regarding the authorisation and organisation of Luxembourg investment fund managers (the Circular). This Circular entered into force with immediate effect and replaced and superseded the CSSF circular 12/546

Asset Flows Update

September 2018 | Eurekahedge


The Eurekahedge Hedge Fund Index was up a flat 0.09% in August while underlying markets as represented by the MSCI World Index gained 1.06% over the same period. Asia focused strategies saw yet another month of decline as recovery in the US coupled with concerns over the US China trade war kept the pressure up on Asian markets with underlying Greater China mandates suffering steep losses. Across strategies, distressed debt, CTA/managed futures and relative value hedge funds led the table with gains of 1.52%, 1.05% and 0.58% respectively.

Hedge Fund Performance Commentary

September 2018 | Eurekahedge


The Eurekahedge Hedge Fund Index ended the month almost flat, gaining 0.09% with gains posted by North American mandated funds offset by losses suffered by managers focusing on Europe, Asia and Latin America. Roughly 28% of the hedge fund managers tracked by Eurekahedge managed to outperform the underlying global equity markets as represented by the MSCI AC World Index (Local) which gained 1.06% over the month. On a year-to-date basis, the Eurekahedge Hedge Fund Index was up 0.45% as of August 2018, with 10% of the constituent funds generating double-digit returns over the first eight months of the year.

Crypto-currencies: the future, or just a speculative bubble?

September 2018 | Eurekahedge


Crypto-currency funds dominated the hedge fund performance league tables back in 2017, thanks largely in part to the gravity defying price of Bitcoin (BTC), Ethereum (ETH), and other major crypto-currencies. The Eurekahedge Crypto-Currency Hedge Fund Index returned 1708.50% throughout the year, outperforming the global hedge fund industry average performance by over two hundredfold. While opinions around the future of crypto-currency became increasingly polarized, the enviable price appreciation continued to attract actively managed funds investing in crypto-currencies.

2018 Key Trends in Asian Hedge Funds

September 2018 | Eurekahedge


The Eurekahedge Asian Hedge Fund Index was down 1.57% year-to-date, and ended up as the only major regional mandate within the Eurekahedge database that was in negative territory over the first seven months of 2018. Asian hedge funds traded under the pressure of the escalating US-China trade war. The United States president Donald Trump officially fired the first shot in the trade war by imposing a 25% tariff to US$34 billion of imported Chinese goods on July 6, 2018 in response to China’s alleged unfair trade practices. The move resulted in China’s retaliatory tariff of the same magnitude on the US agriculture products, which took effect on the same date. After the first tranche of the US and China trade tariffs, the US president proposed another 25% tariff on US$200 billion of imports and further escalated the trade friction between the two largest economies in the world. China’s two mainland stock exchanges continued to slump since the beginning of the year as the impact of the tari

Asian Hedge Funds Infographic September 2018

September 2018 | Eurekahedge


Eurekahedge’s Asian hedge funds infographic sums up the industry as at September 2018. 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.

Hong Kong Regulator Finds a Back Door to Fund Regulation

September 2018 | Greg Heaton, Timothy Loh LLP


While retail funds must be authorized by the Securities and Futures Commission (“SFC”) before distribution in Hong Kong, the SFC has no authority to regulate private funds. Unable to touch these funds directly, the SFC has instead imposed new regulatory requirements on licensed asset managers, financial advisers and fund distributors, through amendments to the Fund Manager Code of Conduct (“FMCC”) and the Code of Conduct for Persons Licensed by or Registered with the SFC (“Code of Conduct”).

Asset Flows Update

August 2018 | Eurekahedge


The Eurekahedge Hedge Fund Index was up 0.41% in July while underlying markets as represented by the MSCI World Index gained 2.59% over the same period. Regional mandates with the exception of underlying Asia focused hedge funds ended the month in the green. Asia focused strategies saw yet another month of decline as recovery in the US coupled with concerns over the US China trade war kept the pressure up on Asian markets. Across strategies, distressed debt and fixed income hedge funds led the table with gains of 0.76% each whilst CTA/managed futures hedge funds posted yet another month of losses.

Hedge Fund Performance Commentary

August 2018 | Eurekahedge


The Eurekahedge Hedge Fund Index ended the month of July up 0.41% as North American and European equity markets enjoyed the boost from strong second quarter earnings season, which somewhat mitigated losses incurred by the global trade friction. Roughly 13% of hedge fund managers tracked by Eurekahedge managed to outperform the underlying global equity markets as represented by the MSCI AC World Index (Local) which gained 2.59% over the month. On a year-to-date basis, the Eurekahedge Hedge Fund Index was up 0.43% as of July 2018.

The consistently consistent: trade finance hedge funds maintain their winning edge amidst the trade war

August 2018 | Eurekahedge


Despite the escalation of the ongoing trade conflict between the US and China, trade finance hedge funds successfully traded their way around this challenge over the past few months. The Eurekahedge Trade Finance Hedge Fund Index has not spent a single month in the red since the year started, and has returned 3.51% as of July 2018 year-to-date, ahead of hedge fund managers utilising fixed income strategies as represented by the Eurekahedge Fixed Income Hedge Fund Index which gained 1.16% over the same period. The custom index, an equal weighted index composite of 26 unique trade finance hedge funds tracks US$3.7 billion in assets under management (AUM) as of July 2018, a figure which has surged more than 50% since the end of 2016.

2018 Key Trends in Global Hedge Funds

August 2018 | Eurekahedge


The Eurekahedge Hedge Fund Index gained 0.02% as of June 2018 year-to-date, showing its worst 1H performance since 1999. The global economy is at risk due to the escalating tension of trade war between the US and China, which started in January 2018 when the US president Donald Trump imposed a tariff on imported solar panels and washing machines. The tension arose when president Trump imposed further tariffs on US$50 billion’s worth of Chinese goods and threatened to implement the same tariffs on an additional US$200 billion of goods imported from the world’s second largest economy. According to the International Monetary Fund chief economist Maurice Obstfeld, the ongoing trade war is a near-term threat to global growth.

Global Hedge Funds Infographic August 2018

August 2018 | Eurekahedge


Eurekahedge’s global hedge funds infographic sums up the industry as at August 2018. 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.

Asset Flows Update

July 2018 | Eurekahedge


The Eurekahedge Hedge Fund Index was down 0.34% in June while underlying markets as represented by the MSCI World Index declined 0.21% over the same period. Regional mandates across the board with the exception of Australia/New Zealand mandated hedge funds ended the month in the red, with emerging markets, in particular Asia-focused strategies seeing the largest declines. Across strategies, event driven hedge funds led the table with gains of 1.17% followed by relative value hedge funds which were up 0.66%.

Hedge Fund Performance Commentary

July 2018 | Eurekahedge


The Eurekahedge Hedge Fund Index slumped 0.34% during the month of June, as managers struggled under the volatile market situation driven by the escalating US-China tariff spat over the month. The transitory ceasefire in the trade war was effectively ended when the White House announced a 25% tariff on US$50 billion of Chinese exports on June 15, which prompted China to respond in kind. Roughly 46% of the hedge fund managers tracked by Eurekahedge managed to outperform the underlying global equity markets as represented by the MSCI AC World Index (Local) which declined 0.21% over the month. The Eurekahedge Hedge Fund Index wrapped the first half of 2018 with a positive yet unremarkable return of 0.08% after spending three months in the red, a far cry from the 3.36% gain posted by the index over the first half of 2017.

The hedge fund ESG experience: the rise of conscientious and responsible alternative investing

July 2018 | Eurekahedge


Investors are increasingly beginning to incorporate ethical considerations into their investment decisions, a development which has given rise to the ESG framework over the years. Despite the implementation challenges which arise when screening investments against acceptable environmental, social and corporate governance themes, the trend towards a more conscientious approach to investment is here to stay, especially from the perspective of large institutional investors. Fund managers, for both actively and passively managed investment vehicles are balancing their quest for superior returns with the need to meet investor demand for responsible investing. Further, an understanding that such an approach to investment can translate into ‘ESG induced alpha’ for managers is further helping the cause of ethically guided investing. This article looks at the performance of funds, both long-only absolute return vehicles and hedge funds, with an active ESG investment framework and how they have

2018 Key Trends in European Hedge Funds

July 2018 | Eurekahedge


The Eurekahedge European Hedge Fund Index gained 0.56% in the first half of 2018, ahead of their global peers’ performance as indicated by the Eurekahedge Hedge Fund Index which was up 0.39% over the same period. European hedge funds returned 7.10% in 2017 on the back of the underlying equity markets’ rally throughout the year, supported by strengthening oil and commodity prices, combined with the unwinding of geopolitical risks within the region. Going into 2018, market volatilities returned and weighed down on the alternative investment industry’s performance. Regional risk outlook seemed to be tilted downward as trade concerns over the steel and aluminium tariffs imposed by the Trump administration and the uncertainties looming over Brexit deals may pose as headwinds against the European economies for the upcoming months.

2018 Key Trends in Long-Only Absolute Return Funds

July 2018 | Eurekahedge


Absolute return funds ended the year 2017 with an impressive gain of 20.44%, beating their hedge fund and fund of hedge fund peers which returned 8.19% and 7.18% respectively, by riding on the global equity market rally which propelled the MSCI AC World IMI Index (Local) to rise 17.51% throughout the year. However, market volatilities struck back in the first half of 2018, and absolute return fund managers were down 0.39% as of May 2018 year-to-date, trailing behind hedge fund managers who returned 0.39% over the same period, owing to the downside protection provided by their hedging strategies.

European Hedge Funds Infographic July 2018

July 2018 | Eurekahedge


Eurekahedge’s European hedge funds infographic sums up the industry as at July 2018. Find out more about European 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.

Proposed Revisions to the Volcker Rule—Prohibitions and Restrictions on Proprietary Trading and Certain Interests in, and Relationships with, Hedge Funds and Private Equity Funds

July 2018 | Mark V. Nuccio and Gideon Blatt, Ropes & Gray


On May 30, 2018, the Federal Reserve Board issued a notice of proposed rulemaking and asked for comment on a proposed rule to simplify and tailor compliance requirements relating to the regulation implementing section 13 (commonly known as the “Volcker Rule”) of the Bank Holding Company Act (“BHC Act”) (the “Proposal”). The Proposal was developed jointly with the Office of the Comptroller of the Currency, the Federal Deposit Insurance Corporation, the Securities and Exchange Commission, and the Commodity Futures Trading Commission (together, the “Agencies”).

Asset Flows Update

June 2018 | Eurekahedge


The Eurekahedge Hedge Fund Index gained 0.33% in May while underlying markets as represented by the MSCI World Index were up 0.84% over the same period. Among regional mandates, North American managers posted the best gains, up 1.43% during the month followed by Asia ex-Japan hedge funds which saw gains of 1.26%. Across strategies, event driven hedge funds led the table with gains of 1.69% followed by long/short equities hedge funds which were up 1.09%.

Hedge Fund Performance Commentary

June 2018 | Eurekahedge


Hedge fund managers successfully remained in the positive territory over the month of May, with the Eurekahedge Hedge Fund Index up 0.33% over the month, supported by the recovery of the global equity markets as represented by the MSCI AC World Index All Cap (Local) which gained 0.84%. Concerns over the trade war between the US and China, as well as geopolitical risks over the Korean peninsula dwindled nearing the end of the month, as the involved parties exhibited amiable dispositions. The armistice in the middle of the US-China tariff war and the results of the Trump-Kim summit held in Singapore in early June might provide a much needed relief for the East Asian equity markets which have been struggling since the start of the year.

Another Atlantic hurricane season looms over the ILS industry

June 2018 | Eurekahedge


The Eurekahedge ILS Advisers Index ended 2017 down 5.60%, breaking the streak of positive returns that lasted for five years, owing to the devastating losses incurred during the Atlantic hurricane season of 2017. The index, which tracks the performance of 34 ILS hedge funds with predominantly non-life risk exposure, declined by 8.61% in the month of September 2017 alone, as the extent of damage caused by hurricane Harvey and hurricane Irma started to come into light. Going into 2018, the index barely budged from its position as at the end of 2017, as it returned 0.07% over the first four months of 2018. Performance across fund managers were mixed, with strong primary cat bond market activities and healthy net inflows providing supports for them, while increased estimations on the losses induced by last year’s Atlantic hurricanes and California wildfire counteracted the gains. However, above-average activity forecasts for the 2018 Atlantic hurricane season may put pressure on ILS fund m

Asset Flows Update

May 2018 | Eurekahedge


The Eurekahedge Hedge Fund Index gained 0.55% in April while underlying markets as represented by the MSCI World Index was up 1.18% over the same period. Among regional mandates, European managers posted the best gains, up 0.78% during the month followed by North American hedge funds which saw gains of 0.27%. Across strategies, distressed debt hedge funds led the table with gains of 1.12% followed by macro hedge funds with 0.84%.

Hedge Fund Performance Commentary

May 2018 | Eurekahedge


Hedge funds successfully traded their way around an overwhelming month in April and were up 0.55% while underlying markets as represented by the MSCI World Index (Local) gained 1.18% during the month. Investors' risk appetite improved in April amid waning concerns over trade war, bolstered by the ‘soft’ tone of Xi Jinping in response to US trade sanctions. Developed markets outperformed their emerging market counterparts during the month, as the latter still remained rather volatile with the region’s equity markets posting a slightly negative return during the month on the back of a strengthening US dollar and concerns over US-China trade spat. Equity markets rebounded in April with strength led by European and North American markets with mixed to flat performance across Asian equity markets. Economic data for Q1 2018 was largely encouraging albeit recovery was at a slower pace with indicators pointing towards global economic expansion. Meanwhile, 58% of the underlying constituent fund

Greater China Equity Hedge Funds: Market Volatility Strikes Back

May 2018 | Eurekahedge


Greater China equity hedge funds ended 2017 with their best annual performance on record since 2009, supported by the remarkable rally of the Chinese equity markets throughout the year. The Eurekahedge Greater China Long Short Equities Hedge Fund Index which tracks 59 Greater China focused hedge funds utilising equity strategies posted a 31.87% gain in 2017, outperforming equity hedge fund managers from the broader region, as represented by the 19.73% return generated by the Eurekahedge Asia Long Short Equities Hedge Fund Index over the same period.

2018 Key Trends in Latin American Hedge Funds

May 2018 | Eurekahedge


The Eurekahedge Latin American Hedge Fund Index was up 5.06% as of March 2018 year-to-date, narrowly outperforming the underlying equity market as represented by the MSCI EM Latin America IMI Index which gained 4.76% over the same period. Latin American hedge fund managers continued to ride on their momentum from last year’s rally despite the difficult trading situations in the first quarter of 2018 which led to the poor performance of the global hedge fund managers who lost 0.30% on average in the quarter. Robust labour market and strengthening private consumption, combined with healthy commodity exports are expected to provide support for the region’s economies, while on the other hand protectionist policies in the United States and political uncertainties induced by the upcoming elections in Brazil, Colombia and Venezuela are among the major downside risks for investors looking into Latin America.

Latin American Hedge Funds Infographic May 2018

May 2018 | Eurekahedge


Eurekahedge’s Latin American hedge funds infographic sums up the industry as at May 2018. Find out more about Latin 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.

Private Equity and Hedge Funds in Puerto Rico - a Welcoming Environment in the Caribbean

May 2018 | Nikos Buxeda, Manuel López-Zambrana, Camille Alvarez and Juan Carlos Feliciano, DLA Piper


Ten years ago, private equity funds and hedge funds were practically nonexistent in Puerto Rico. This has changed dramatically as the result of two main developments: the enactment of Act 185-2014, known as the Private Equity Funds Act and (ii) the influx of financial industry professionals moving to the island to take advantage of the tax benefits available under Acts 20 and 22 (for a more detailed discussion of those benefits, please see Puerto Rico's Act 20 and Act 22 – key tax benefits).

Asset Flows Update

April 2018 | Eurekahedge


The Eurekahedge Hedge Fund Index declined 0.54% in March while underlying markets as represented by the MSCI World Index declined 2.21% over the same period. Among regional mandates, Latin American managers posted the best gains, up 0.81% while all other regional mandates languished into negative territory. Across strategies, distressed debt hedge funds led the table with gains of 5.74% followed by relative value hedge funds which were up 0.31%.

Hedge Fund Performance Commentary

April 2018 | Eurekahedge


Hedge funds registered their second consecutive month of losses since the start of the year, with the Eurekahedge Hedge Fund Index declining 0.54% in March, while still outperforming the MSCI World Index which ended the month down 2.21%. The average return of the global hedge fund was pulled into negative territory in March as choppy trading conditions across commodities, and weaker global equity performance continued to affect the trading scene. March was marked by investors’ concerns over the US and China trade war which made headlines throughout the month and negatively affected the global equity markets, most of which ended the month in the red. As of Q1 2018, hedge funds are down 0.13%, ahead of underlying markets as the MSCI World Index posted losses of 2.24%. Close to 55% of managers were in positive territory, and roughly 6% posted year-to-date returns in excess of 10% over the first quarter. Latin American managers led among regional mandates this month with their 0.81% gain,

Indian Hedge Funds: Good Returns, Mediocre Alpha?

April 2018 | Eurekahedge


Indian hedge funds outperformed their global peers by a large margin in 2017, riding on the back of the Indian equity market’s exceptional performance over the year. The Eurekahedge India Hedge Fund Index generated 28.96% return over 2017, dwarfing the 8.25% return posted by the Eurekahedge Hedge Fund Index over the same period, which also happened to be the best annual performance of the global hedge fund industry since 2013. However, most of those gains were generated through exposure toward the fast growing equity market of the country, raising the question of whether some of these hedge fund managers actually generate enough alpha for their investors to justify their management and performance fees.

2017 Overview: Key Trend in Asian Hedge Funds

April 2018 | Eurekahedge


Asian hedge funds ended 2017 with their strongest performance recorded since 2009, as reflected by the 16.94% gain posted by the Eurekahedge Asian Hedge Fund Index, which is more than double the 8.25% gain generated by their global peers represented by the Eurekahedge Hedge Fund Index over 2017. Incredible stock market rallies across the continent, especially in Greater China and India, combined with strong economic growth have greatly contributed to the performance of the hedge fund managers with exposure toward the region.

Asian Hedge Funds Infographic April 2018

April 2018 | Eurekahedge


Eurekahedge’s Asian hedge funds infographic sums up the industry as at April 2018. 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.

Asset Flows Update

March 2018 | Eurekahedge


The Eurekahedge Hedge Fund Index declined 1.62% in February outperforming underlying markets as represented by the MSCI World Index which fell 3.68% over the same period. Among regional mandates, Latin American managers led the table, up 0.66% during the month while other regional mandated funds languished into negative territory. Across strategies, distressed debt hedge funds led the table with gains of 1.32% followed by arbitrage hedge funds which were up 0.53%.

Hedge Fund Performance Commentary

March 2018 | Eurekahedge


Global markets underwent a sharp and speedy correction in February which saw equity markets post steep losses as investors prepared for a faster than expected interest rate hike in the US. The average return of the global hedge fund industry was pulled into negative territory as markets experienced sharp reversals, with trend following CTA/managed futures and long/short equities strategies lagging behind the pack. Hedge funds registered their first monthly loss of the year with the Eurekahedge Hedge Fund Index down 1.62% in February as volatility levels spiked across the board and unravelled the volatility risk premium trade. Despite steep losses during the month, hedge funds have protected on the downside and managed to outperform underlying markets as the MSCI AC World Index (Local) declined 3.68% in February.

Billion Dollar Systematic Macro Hedge Funds Lose Close to 5% in February

March 2018 | Eurekahedge


This piece looks at the performance of CTA/managed futures hedge funds and its various sub-groups which have come under pressure during the difficult market environment of February. We conclude by looking at the returns for the industry heavy weight systematic macro hedge funds overseeing assets in excess of US$1 billion which recorded steep monthly losses in February declining 4.77%. In contrast to popular news insinuating that the recent market melt-down was the doing of a handful of AI hedge fund managers which recorded their worst monthly loss on record, it seems that the major casualties lie somewhere elsewhere.

2017 Overview: Key Trend in North American Hedge Funds

March 2018 | Eurekahedge


The North American hedge fund industry grew by US$136.4 billion over 2017, owing to the strong performance of hedge fund managers, as indicated by the 8.60% gain posted by the Eurekahedge North American Hedge Fund Index over the year, which is its strongest performance since 2013. Thanks to the strong equity market performance around the globe, hedge funds with high long exposure to equities enjoyed the benefits of the record breaking equity market rallies. Despite falling behind their peers from Latin America and Asia, North American hedge funds kicked off 2018 with a decent performance, gaining 1.54% in January. Long/short equities funds topped the chart among strategic mandates with their 2.04% gain over the first month of 2018.

North American Hedge Funds Infographic March 2018

March 2018 | Eurekahedge


Eurekahedge’s North American hedge funds infographic sums up the industry as at March 2018. 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.

Independent Directors on Hedge Fund and Private Equity Boards - The Cayman Trend

March 2018 | Joanne Huckle, Ogier


It has become an established industry norm to see independent directors appointed to the boards of offshore hedge funds. It is no longer a 'check box exercise' to confirm independent directors have been appointed. Institutional investors are increasingly concerned about the composition of the board, the experience and skill set of its members and the day to day relationship between both the board members themselves and the board and the investment manager.

Asset Flows Update

February 2018 | Eurekahedge


The Eurekahedge Hedge Fund Index was up 2.20% in January while underlying markets as represented by the MSCI World Index gained 3.78% over the same period. Among regional mandates, Latin American managers led the table, up 4.47% during the month followed by Asia ex-Japan managers who were up 3.72%. Across strategies, CTA/managed futures hedge funds led the table with gains of 3.54% followed by long/short equities hedge funds which were up 2.37%.

Hedge Fund Performance Commentary

February 2018 | Eurekahedge


January was a happy start to the year for hedge funds, with the Eurekahedge Hedge Fund Index up 2.20% in January. Meanwhile, underlying markets as represented by the MSCI AC World Index (Local) gained 3.78% over the same period. As the global risk on mode continues into January, trend following managers were positioned in good stead with holdings into equities and oil among performance contributors.

Artificial Intelligence: The New Frontier for Hedge Funds (2/2)

February 2018 | Eurekahedge


This piece revisits the performance of hedge funds that utilise artificial intelligence and machine learning theory in their trading process, focusing on the overall risk-return profile of artificial intelligence (AI) hedge funds as captured by the Eurekahedge AI Hedge Fund Index in comparison to traditional quants, equity-hedge strategies and the average global hedge fund.

2017 Overview: Key Trends in Islamic Funds

February 2018 | Eurekahedge


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.

2018 Key Trends in UCITS Hedge Funds

February 2018 | Eurekahedge


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.

UCITS Hedge Funds Infographic February 2018

February 2018 | Eurekahedge


Eurekahedge’s UCITS hedge funds infographic sums up the industry as at February 2018. 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.

Asset Flows Update

January 2018 | Eurekahedge


Hedge funds edged higher in the final month of the year, with the Eurekahedge Hedge Fund Index gaining 0.86% in December while underlying markets as represented by the MSCI World Index was up 1.19% over the same period. Among regional mandates, Latin American managers led the table, up 2.50% during the month followed by Asia ex-Japan managers who were up 1.41%. Across strategies, event driven hedge funds led the table in December with gains of 1.57% followed by multi-strategy hedge funds which were up 1.31%.

Hedge Fund Performance Commentary

January 2018 | Eurekahedge


2017 ended positively with much pomp and was a strong year for global markets. Hedge funds closed the final month of the year in positive territory with the Eurekahedge Hedge Fund Index up 0.86% in December while the MSCI World Index finished the month up 1.19%. For 2017 as a whole, hedge funds were up 8.25%, while underlying markets as represented by the MSCI World Index returned 17.55% over the same period.

Eurekahedge European Investor Perspectives – Series 1 of 2

January 2018 | Eurekahedge


Altinvestor Europe 2017 took off with a powerful opening presentation from a highly experienced pension executive presenting on how pension funds could secure long term success through collaboration with peers and asset managers and taking a more active and innovative approach to pension fund investment management.

2017 Overview: Key Trends in Global Hedge Funds

January 2018 | Eurekahedge


The Eurekahedge Hedge Fund Index gained 7.32% as of November 2017 year-to-date, and is on track to post 12 consecutive months of positive gains in an annual year for the first time since 1999. Total assets managed by the global hedge fund industry currently stands at US$2413.0 billion, up US$188.2 billion over the year, which is the highest annual growth recorded since the end of 2013.

Global Hedge Funds Infographic January 2018

January 2018 | Eurekahedge


Eurekahedge’s global hedge funds infographic sums up the industry as at January 2018. 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.

Asset Flows Update

December 2017 | Eurekahedge


The Eurekahedge Hedge Fund Index gained 0.32% in November while underlying markets as represented by the MSCI World Index was up 1.16% over the same period. Among regional mandates, Asia ex-Japan managers posted the best gains, up 1.53% during the month followed by Japanese and North American hedge funds seeing gains of 1.06% and 0.86% respectively. Across strategies, relative value hedge funds led the table with returns of 0.89% followed by long/short equities and multi-strategy hedge funds which were up 0.75% and 0.22% respectively, the only two strategies who posted 12 consecutive months of gains in 2017 as global equity markets continue to rally throughout the year.

Hedge Fund Performance Commentary

December 2017 | Eurekahedge


Hedge funds were up 0.32% during the month of November, with 2017 year-to-date returns coming in at 7.27%. Meanwhile, underlying markets as represented by the MSCI AC World Index (Local) gained 1.16% in November with its 2017 year-to-date returns coming in at 16.17%. Roughly 76% of underlying constituent funds for the Eurekahedge Hedge Fund Index were in positive territory this month, with majority of them being long/short equities mandated. Equity markets continued to perform well this month with strength led by US and emerging Asian markets. Encouraging macroeconomic data from US and Japan buoyed market sentiment with growth in manufacturing activity adding to much optimism.

Hedge Fund Round Up 2017

December 2017 | Eurekahedge


Early estimates put the Eurekahedge Hedge Fund Index return at 7.81% by the end of 2017, and hedge funds are on track to post twelve consecutive positive months in a year for the first time since 1999.

2017 Key Trends in European Hedge Funds

December 2017 | Eurekahedge


The Eurekahedge European Hedge Fund Index gained 6.91% in 2017 year-to-date, slightly behind their global peers’ performance as indicated by the Eurekahedge Hedge Fund Index which gained 6.93% over the same period. Hedge fund managers have been able to capture a portion of the underlying market’s rally as European economies recover over the year. Strengthening oil and commodity prices, combined with the unwinding of geopolitical risks will continue to support the region’s growth in 2018. The hedge fund industry is expected to benefit from the strong market performance of the region over the next year.

European Hedge Funds Infographic December 2017

December 2017 | Eurekahedge


Eurekahedge’s European hedge funds infographic sums up the industry as at December 2017. Find out more about European 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.

Asset Flows Update

November 2017 | Eurekahedge


The Eurekahedge Hedge Fund Index was up 1.28% in October while underlying markets as represented by the MSCI World Index gained 2.56% over the same period. Among regional mandates, Asia ex-Japan managers led the table, up 2.82% during the month followed by Japanese managers who were up 1.77%. Across strategies, CTA/managed futures hedge funds led the table with gains of 2.66% followed by macro hedge funds which were up 1.72%.

Hedge Fund Performance Commentary

November 2017 | Eurekahedge


Hedge funds were up 1.28% during the month of October, with 2017 year-to-date returns coming in at 6.99%. Meanwhile, underlying markets as represented by the MSCI AC World Index (Local) gained 2.56% in October with its 2017 year-to-date returns at 14.84%. Roughly 77% of the underlying constituent hedge funds for the Eurekahedge Hedge Fund Index were in positive territory this month thanks to a broad-based rally in global equity markets and an improving investor risk appetite. Asia ex-Japan managers led the performance among regional mandates this month, up 2.82%, while CTA/managed futures managers topped the table across strategies gaining 2.66% over the same period.

Actively Managed Crypto-Currency Strategies

November 2017 | Eurekahedge


Crypto-currency funds continue to dominate hedge fund performance league tables’ thanks largely in part to the gravity defying price of bitcoins. In fact since we first published an index tracking the performance of crypto-currency investing hedge funds earlier this year, the price of bitcoin, the most liquid and the shiniest of all crypto-currencies has almost quadrupled. While opinions around the future of crypto-currency have become increasingly polarized, the enviable price appreciation continues to attract actively managed funds towards investments in crypto-currencies.

2017 Key Trends in Latin American Hedge Funds

November 2017 | Eurekahedge


The Eurekahedge Latin American Hedge Funds Index gained 14.16% as of September 2017 year-to-date, while MSCI EM Latin America IMI Index posted 18.73% over the same period. Latin American hedge funds still outperformed their European and North American counterparts by a sizeable margin and remain attractive to investors in 2017, as indicated by the 2017 year-to-date investor inflows which stand just above the US$6 billion mark, bringing the cumulative AUM to match the previous 2013 year end peak at US$60.3 billion.

Latin American Hedge Funds Infographic November 2017

November 2017 | Eurekahedge


Eurekahedge’s Latin American hedge funds infographic sums up the industry as at November 2017. Find out more about Latin 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.

Interview with Niklaus Hilti, CEO and CIO of Credit Suisse Insurance Linked Strategies Ltd

November 2017 | Eurekahedge


Niklaus Hilti is the Chief Executive Officer and Chief Investment Officer of Credit Suisse Insurance Linked Strategies Ltd., which manages a number of funds focused on insurance linked investments.

Asset Flows Update

October 2017 | Eurekahedge


The Eurekahedge Hedge Fund Index gained 0.42% in September1 while underlying markets as represented by the MSCI World Index2 were up 2.17% over the same period. Among regional mandates, Japanese managers posted the best gains with 1.72% during the month followed by Asia ex-Japan and Latin American hedge funds with returns of 1.25% and 1.15% respectively. Across strategies, long/short equity hedge funds led the table with gains of 1.46% followed by event driven hedge funds, up 0.80%.

Hurricane Season Takes Toll on ILS Managers

October 2017 | Eurekahedge


After 5 consecutive years of positive returns, hedge funds with exposure to catastrophe bonds or Cat bonds for short, are on track to post their first year of losses as the full extent of damages from Hurricane Harvey, Irma and Maria come to light. An index of such funds tracked by Eurekahedge who explicitly allocate to insurance linked investments and have at least 70% of their portfolio invested in non-life risk – the Eurekahedge ILS Advisers Hedge Fund Index was down 0.33% in August and 5.46% in September, bringing the year-to-date return into negative territory with a loss of 3.69%. This comes after ILS hedge funds delivered compound returns of 15.60% versus 12.21% for the average hedge fund in the three year period ending December 2016.

2017 Key Trends in North American Hedge Funds

October 2017 | Eurekahedge


Assets for the North American hedge fund industry grew by US$68.5 billion through 2017 September year-to-date, with the majority of the growth being contributed by a resurgence in investor inflows into the industry. Managers posted performance based gains of US$22.0 billion in 2017, while the Eurekahedge North American Hedge Fund Index was up 3.23% over the same period. Event Driven mandated hedge funds topped the performance table across strategic mandates returning 4.56% in 2017 thus far. Among geographic mandates, fund managers with exposure to Asia Pacific posted the best 2017 year-to-date performance by gaining 13.83%.

North American Hedge Funds Infographic October 2017

October 2017 | Eurekahedge


Eurekahedge’s North American hedge funds infographic sums up the industry as at October 2017. 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.

Interview with Niklaus Hilti, CEO and CIO of Credit Suisse Insurance Linked Strategies Ltd

October 2017 | Eurekahedge


Credit Suisse Insurance Linked Strategies (CSILS) team has one of the longest track records in the ILS space dating back to 2003 when members of our team first managed ILS funds at Bank Leu, a former Credit Suisse Group subsidiary.

Interview with Andrew Jackson, Managing Director, HSBC Global Asset Management

October 2017 | Eurekahedge


HSBC Global Asset Management had approximately $10bn of Structured Credit / ABS under management. The team is one of the largest in the industry, with 14 dedicated specialists whose sole focus is structured credit research and client investment.

Asset Flows Update

September 2017 | Eurekahedge


The Eurekahedge Hedge Fund Index gained 0.73% in August while underlying markets as represented by the MSCI World Index, were up 0.15% over the same period. Among regional mandates, Latin American managers led the table, up 3.26% during the month followed by Asia ex-Japan managers who were up 1.50%. Across strategies, CTA/managed futures hedge funds led the table with gains of 1.24% followed by macro hedge funds which were up 1.04%.

2017 Key Trends in Asian Hedge Funds

September 2017 | Eurekahedge


The Asian hedge fund industry has rebounded strongly in 2017, with managers running Asian mandates on track to outperform their global peers – Asia mandated hedge funds are up 9.86% relative to gains of 4.42% posted by the average global hedge fund. Investor appetite for the region has also picked up, with US$5.6 billion of net investor flows during the year as managers recorded US$6.7 billion in performance-based gains. Underlying Asia ex-Japan mandates have posted stellar returns, up 12.48% year-to-date helped by strong performance of underlying Greater China and India focused managers which are up 17.39% and 19.69% respectively for the year. Japanese hedge funds have also posted strong gains, and led on a year-to-date basis among developed market mandates with gains of 5.93%, while their North American and European peers gained 3.30% and 4.36% respectively.

Asian Hedge Funds Infographic September 2017

September 2017 | Eurekahedge


Eurekahedge’s Asian hedge funds infographic sums up the industry as at September 2017. 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.

US Equity Hedge Funds Gain on Trump Boost

September 2017 | Eurekahedge


November 2016, what many thought was unthinkable became a reality when Donald Trump assumed power in the United States. His unpredictability and outspokenness had already spooked markets in the lead up to the election, but what has happened since has been quite remarkable in its own right. Markets, which once feared the idea of a Trump presidency embraced it whole-heartedly, and what President Trump had once called ‘a big, fat, ugly bubble’ got a new lease of life. The rhetoric was toned down and the handshakes were tempered as the prospect of a renewed fiscal stimulus coupled with economic de-regulation set about trying to woo markets. While little has materialized save a deadlock on Capitol Hill, markets have risen to new highs.

Asset Flows Update

August 2017 | Eurekahedge


The Eurekahedge Hedge Fund Index grew 0.88% in July while underlying markets, as represented by the MSCI World Index, gained 1.64% over the same period. Among regional mandates, Latin American managers led the table, up 3.68% during the month followed by Asia ex-Japan managers who were up 2.45%. Across strategies, long/short equities hedge funds led the table with gains of 1.15% followed by CTA/managed futures hedge funds which were up 1.08%.

The Hedge Fund ESG Experience: A Growing Conscience for Absolute Returns

August 2017 | Eurekahedge


Investors are increasingly beginning to incorporate ethical considerations into their investment decisions, a development which has given rise to the environmental, social, governance (ESG) framework over the years. Despite the implementation challenges which arise when screening investments against acceptable environmental, social and corporate governance themes, the trend towards a more conscientious approach to investment is here to stay, especially from the perspective of large institutional investors.

2017 Key Trends in Global Hedge Funds

August 2017 | Eurekahedge


The global hedge fund industry is on track to post a solid recovery in 2017as underlying markets trend upwards against the backdrop of subdued volatility in asset prices. The Trump presidency which was expected to spook market sentiment has been surprisingly constrained so far with regards to delivering on the campaign agenda, in particular policies pertaining to global trade. Rather, expectations of a fiscal expansion in the US lend support to markets early during the year while his first tour as President of the United States helped calm nerves overseas, barring the odd-handshakes and other presidential antics. Risk appetite generally improved during the year, with equity long bias strategies posting double digit gains whilst returns for macro and systematic managed futures strategies languished in a low volatility regime.

2017 Key Trends in Emerging Market Hedge Funds

August 2017 | Eurekahedge


Emerging market mandated hedge funds have delivered exceptionally strong gains this year – the asset weighted US dollar denominated Mizuho-Eurekahedge Emerging Market Index is up 7.59% for the year, with underlying equity long/short hedge funds for the index gaining 9.75% in the seven months through July. Hedge funds running dedicated exposure to India, China and Latin America have all posted double-digit gains year-to-date and have been the key contributors to the stellar returns posted by emerging market mandated hedge funds.

Global Hedge Funds Infographic August 2017

August 2017 | Eurekahedge


Eurekahedge’s global hedge funds infographic sums up the industry as at August 2017. 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.

Asset Flows Update

July 2017 | Eurekahedge


The Eurekahedge Hedge Fund Index down 0.07% in June while underlying markets as represented by the MSCI World Index gained 0.18% over the same period. Among regional mandates, Asia ex-Japan managers led the table with growth of 1.29% during the month followed by Japanese managers who were up 1.05%. Across strategies, event driven hedge funds led the table with gains of 0.79% followed by relative value hedge funds which were up 0.61%.

China A-Share Investing Hedge Funds Strategy Profile

July 2017 | Eurekahedge


A revival appears to be underway for China investing mandates in 2017 following disappointing returns last year. The recent decision by MSCI to include Chinese A Shares in its broader Emerging Market Indices is likely to support this trend, though exposure through long-only type vehicles to underlying markets could take investors for a ride given the inherent volatility. This piece looks at the performance of China A-Share investing hedge funds and how they have managed to ride the volatility in underlying markets over the years.

2017 Key Trends in European Hedge Funds

July 2017 | Eurekahedge


The European hedge fund industry has been gaining since the start of the year despite political uncertainty in the Eurozone area. Investor allocations into the industry stood at US$3.5 billion over the first five months of 2017, though the first two months of the year show investors’ redemptions to the tune of US$2.8 billion as concern arose over the outcome of the French presidential election results.

2017 Key Trends in UCITS Hedge Funds

July 2017 | Eurekahedge


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 liquidity of the underlying assets and leverage caps to provide added transparency to investors.

European Hedge Funds Infographic July 2017

July 2017 | Eurekahedge


Eurekahedge’s European hedge funds infographic sums up the industry as at July 2017. Find out more about European 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.

UCITS Hedge Funds Infographic July 2017

July 2017 | Eurekahedge


Eurekahedge’s UCITS hedge funds infographic sums up the industry as at July 2017. Find out more about Latin 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.

Asset Flows Update

June 2017 | Eurekahedge


The Eurekahedge Hedge Fund Index was up 0.33% in May while underlying markets as represented by the MSCI World Index gained 1.09% over the same period. Among regional mandates, Japanese managers led the table, up 1.58% during the month followed by Asia ex-Japan managers who were up 0.93%. Across strategies, event driven hedge funds led the table with gains of 0.71% followed by long/short equities hedge funds with gains of 0.49%.

Crypto-Currency Funds Strategy Profile

June 2017 | Eurekahedge


Since 2013, a new breed of actively managed crypto-currency alternative funds has been coming to the fore. Initially starting off with dedicated exposure to bitcoins, these funds have now diversified across the breadth of crypto-currencies and consistently rank at the top of performance tables thanks to the skyrocketing price of crypto-currencies over the past few years.

2017 Key Trends in Latin American Hedge Funds

June 2017 | Eurekahedge


The Eurekahedge Latin American Hedge Fund Index was up 7.10% in April year-to-date underperforming underlying markets as represented by the MSCI Latin American Index which were up 8.03% over the same period. The strength of Latin American hedge fund industry has been well-supported by the recovery of commodity prices during the first four months of the year, with the Ibovespa Index up a modest of 0.65%.

Latin American Hedge Funds Infographic June 2017

June 2017 | Eurekahedge


Eurekahedge’s Latin American hedge funds infographic sums up the industry as at June 2017. Find out more about Latin 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.

Asset Flows Update

May 2017 | Eurekahedge


The Eurekahedge Hedge Fund Index was up 0.64% in April while underlying markets as represented by the MSCI World Index gained 1.17% over the same period. Among regional mandates, Asia ex-Japan managers led the table, up 1.28% during the month followed by European managers who were up 1.10%. Across strategies, event driven hedge funds led the table with gains of 1.44% followed by long/short equities hedge funds which were up 1.05%.

Merger Arbitrage Hedge Funds Strategy Profile

May 2017 | Eurekahedge


Corporate events such as mergers and acquisitions (M&A) and company spinoffs provide opportunities for merger arbitrage hedge funds to capitalise on pricing inefficiencies prior to the completion of a transaction. Before acquisition, the price of the share of a target company is usually traded at a discounted price, creating a potential opportunity for merger arbitrageurs to reap gains once the transaction is complete. However, much of the opportunities within the merger arbitrage space lies in the health of M&A activity as well as other factors which would motivate (or de-motivate) the successful transaction of an M&A deal. For instance, the Pfizer/Allergan M&A deal was threatened by US regulatory challenges and this led to the abandonment of the deal. Other than regulatory challenges, the outlook of the global economy as well as business sentiments play an integral role in sustaining the appetite for corporate activity by conglomerates.

Global Funds of Hedge Funds Infographic May 2017

May 2017 | Eurekahedge


Eurekahedge’s global funds of hedge funds infographic sums up the industry as at May 2017. Find out more about Global funds of 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.

Interview with Isaac Lieberman, CEO and Founder of Aston Capital Management

May 2017 | Eurekahedge


Isaac Lieberman founded Aston Capital Management as a quantitative hedge fund in November 2013. As a veteran trader of proprietary quantitative strategies, Isaac has more than 20 years of experience trading in global FX and fixed income markets. Prior to founding ACM, Isaac was Managing Director at J.P. Morgan where he was the Head of Algorithmic Trading and the Head of Electronic FX Options Trading. Before joining J.P Morgan in 2008, Isaac was Head of the FX and Fixed Income division in the Principal Strategies Group at Bear Stearns where he worked from 1996.

Asset Flows Update

April 2017 | Eurekahedge


The Eurekahedge Hedge Fund Index was up 0.34% in March while underlying markets as represented by the MSCI World Index gained 0.79% over the same period. Among regional mandates, Asia ex-Japan managers led the table, up 2.02% during the month followed by European managers who were up 0.73%. Across strategies, long/short equities hedge funds led the table with gains of 1.06% followed by event driven hedge funds which were up 0.47%.

Man versus Machine: Quantitative Hedge Funds

April 2017 | Eurekahedge


The rise of computer-driven strategies in the hedge fund sphere has caught considerable interest from the investment community over recent years. These quantitative hedge funds incorporate automated trading strategies, enabling them to capitalise on price discrepancies in the markets through executing trade positions within a very short span of time. While these systematic hedge funds have been employing methods of technical analysis into their trading strategies, sentiment analysis is also an up and coming feature in investment decisions. Text-mining data collected from various sources could be an indicator of ground sentiment during key market events, which can then be used as inputs in trading models or for risk control.

2016 Overview: Key Trends in Asian Hedge Funds

April 2017 | Eurekahedge


The hedge fund industry in Asia witnessed a difficult 2016 with investor redemptions a main contributor to the lethargy in asset base. Investors redeemed US$3.4 billion during the course of the year, with modest performance-based gains of US$1.6 billion recorded. Indeed, hedge funds globally have had a challenging year with strong redemption pressure from investors, and Asia as a whole was not isolated from this outlook.

Asian Hedge Funds Infographic April 2017

April 2017 | Eurekahedge


Eurekahedge’s Asian hedge funds infographic sums up the industry as at April 2017. Find out more about global hedge funds assets under management (AUM), asset flows into strategic and regional mandates, launches and closures, fund size, head office locations and the best and worst performances of the year.

Interview with Filippo Pignatti, Fund Manager at The Classic Car Fund

April 2017 | Eurekahedge


The Classic Car Fund was launched in September 2012, driven both by a passion for cars and for uncorrelated alternative assets. The philosophy of The Classic Car Fund is simple; buy well-selected cars at attractive prices that have had a thorough evaluation by an independent expert, and sell them later at a profit. The fund is not focused on any specific make or production year, but emphasis is clearly on sports cars from various periods. Holding times vary vastly but the fund does not fall in love with its investments. Some cars have enabled the fund to realise a healthy double-digit profit in as little as three months, while others will remain in the fund for up to a few years. Also, and perhaps of more interest for most, against a small fee fund investors may borrow and drive some cars in the fund over a day or a weekend. If anyone asks you can truthfully say it is your car, as it is part of the fund you are an owner of.

Interview with Kevin Ellis, Managing Director at Horse Cove Partners

April 2017 | Eurekahedge


Kevin Ellis brings more than 30 years of financial, administrative and operations experience to the Firm. Previously, Mr. Ellis was the COO and principal of FISCO Appreciation Management LLC. He also served as a Founding Principal, Managing Director and COO at Labyrinth Group, LLC, an investment management firm utilising structured securities. Prior to that, he was Manager of Corporate Development at Arthur Anderson, LLP, where he focused on finance, mergers and acquisitions. Earlier in his career, he served as Vice President of Business Planning at SUPERVALU, Inc. Mr. Ellis is a graduate of Minnesota State University-Mankato BA Finance and earned a Juris Doctorate from William Mitchell College of Law and was admitted to the bar in Minnesota in 1983.

Asset Flows Update

March 2017 | Eurekahedge


The Eurekahedge Hedge Fund Index was up 0.97% in February while underlying markets as represented by the MSCI World Index gained 2.72% over the same period. Among regional mandates, Latin American managers led the table, up 2.75% during the month followed by Asia ex-Japan managers with 1.43%. Across strategies, distressed debt hedge funds were in the lead with 1.34% gains followed by event driven hedge funds with 1.26%.

2016 Roundup - Activist Hedge Funds

March 2017 | Eurekahedge


Activist hedge funds, a sub-strategy of event driven hedge funds, deploy shareholder activism as a key cornerstone of their investment strategy and have closer interactions with management of the companies which they invest into. Cultural differences also play a part in the adopted style of activism with Western activist hedge funds pursuing a dynamic approach, while their Asian counterparts adopt a more engagement-styled activism. This special feature takes a quick look at activist hedge funds, which have markedly outperformed their global hedge fund peers in 2016.

2016 Overview: Key Trends in North American Hedge Funds

March 2017 | Eurekahedge


Assets for the North American hedge fund industry grew by US$19.1 billion for annual year 2016, with strength led by manager performance as opposed to investor interest. Managers posted performance-based gains of US$34.0 billion in 2016, with the Eurekahedge North American Hedge Fund Index was up 7.77% over the same period, outperforming regional peers. Event driven mandated hedge funds led performance across strategic mandates, up 18.19% in 2016 followed by distressed debt and multi-strategy hedge funds which gained 12.86% and 11.17% respectively.

North American Hedge Funds Infographic March 2017

March 2017 | Eurekahedge


Eurekahedge’s North American hedge funds infographic sums up the industry as at March 2017. 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.

Interview with Wang Qiang, CIO at Pinpoint Asset Management Limited

March 2017 | Eurekahedge


Founded in 1999, Pinpoint is an Asia-based investment management firm that serves institutional investors, pension funds, private banks, fund of funds, family offices and high net worth individuals. Pinpoint Asset Management Limited was incorporated in Hong Kong on 4 Jun 2010 and regulated by the Hong Kong Securities Futures Commission for Type 9 (asset management) activities.

Asset Flows Update

February 2017 | Eurekahedge


The Eurekahedge Hedge Fund Index was up 0.87% in January while underlying markets as represented by the MSCI World Index gained 1.49% over the same period. Among regional mandates, Latin American managers led the table, up 3.73% during the month followed by Asia ex-Japan managers who increased by 1.93%. Across strategies, event driven hedge funds led the table with gains of 2.02% followed by long/short equities hedge funds which increased by 1.65%.

2016 Roundup - Equity Focused Hedge Fund Strategies

February 2017 | Eurekahedge


Equity focused hedge fund strategies have seen their assets under management (AUM) grow from US$460.2 billion since end-2009 to US$778.0 billion as of January 2017 through a combination of performance-based gains and investor allocations over the years. Having recorded six consecutive years of asset growth between 2010 to 2015, long/short equity hedge fund AUM contracted for the first time in 2016, declining by 2.56% on the back of steep investor redemptions totalling US$29.1 billion. Performance-based gains were the lowest on record in the last five years following losses in 2011. While 2017 has started on a positive note, with assets for long/short equity hedge funds approaching the US$800 billion mark, the year holds much uncertainty in store.

Long-Only Absolute Return Funds Infographic February 2017

February 2017 | Eurekahedge


Eurekahedge’s long-only absolute return funds infographic sums up the industry as at February 2017. Find out more about long-only absolute return 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.

2016 Overview: Key Trends in Islamic Funds

February 2017 | Eurekahedge


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. Islamic financial products are accessible to all investors, some of whom choose to allocate into Islamic funds for purposes of portfolio diversification or their preference in investing in products which deemed as socially responsible. In recent years, Islamic finance has been catching on with traditional finance institutions as international banks have expanded into providing Islamic finance services. As the use of derivatives, options and futures are deemed to be speculati

Interview with Maciej Wisniewski, Founder and Portfolio Manager at Macromoney

February 2017 | Eurekahedge


Maciej Wisniewski is the Founder and Fund Manager of Macromoney and has full oversight of all company operations. Maciej has 20 years of experience in investments management and in successfully setting up investment funds.

Asset Flows Update

January 2017 | Eurekahedge


The Eurekahedge Hedge Fund Index grew 1.03% in December while underlying markets as represented by the MSCI World Index were up 2.38% over the same period. Among regional mandates, North American managers led the table, up 1.22% during the month followed by European managers with 1.07%. Across strategies, event driven hedge funds were in the lead with 1.65% gains followed by macro hedge funds with 1.32%.

Hedge Fund Performance Commentary

January 2017 | Eurekahedge


Hedge funds gained 1.03% during the month of December, with 2016 returns coming in at 4.48%. Meanwhile, underlying markets as represented by the MSCI AC World Index (Local) gained 2.38% in December with its 2016 returns coming in at 7.37%. North American equity markets traded higher in December as the Trump-driven reflation theme buoyed markets in a somewhat ‘honeymoon’ period post-election. The S&P 500 Index gained 1.82% during the month, with the DJIA also up 3.34%.

Artificial Intelligence: The new frontier for hedge funds

January 2017 | Eurekahedge


Quantitative hedge fund strategies have received considerable interest from investors over the last decade. The application of growing computing power and the availability of big data has enabled these systematic trading models to capitalise on market inefficiencies that were otherwise difficult to identify or harvest given the implied trading costs. However, this growth has met with some headwinds on two key accounts; firstly, trading models built using back-tests on historical data have often failed to deliver good returns in real time (as previously identified trends have broken down), and secondly, the diffusion of similar quant models which has led to crowding in the space and consequently depressed the returns from such strategies.

2016 Overview: Key Trends in Global Hedge Funds

January 2017 | Eurekahedge


2016 has been quite a nerve-wrecking year as the global hedge fund industry anticipated and responded to a string of unexpected events. As such, market jitters were very much present for investors as the results of two major events which had happened - Brexit and the US Presidential Elections, had caught the world by surprise. The global hedge fund industry faced steep redemption pressure from investors this year, with total net outflows coming in at US$28.2 billion. On the other hand, managers posted good performance-based gains, up US$17.8 billion over the same period.

Global Hedge Funds Infographic & Top Hedge Fund Strategies January 2017

January 2017 | Eurekahedge


Eurekahedge’s global hedge funds infographic sums up the industry as at January 2017. Find out more about global hedge funds assets under management (AUM), asset flows into strategic and regional mandates, launches and closures, fund size, head office locations and the best and worst performances of the year.

Asset Flows Update

December 2016 | Eurekahedge


The Eurekahedge Hedge Fund Index gained 0.41% in November while underlying markets as represented by the MSCI World Index grew 2.88% over the same period. Among regional mandates, North American managers led the table, up 2.28% during November followed by Japan managers with 1.16% gains. Across strategies, event driven hedge funds led with 1.85% growth followed by distressed debt hedge funds which grew 1.69%.

Hedge Fund Performance Commentary

December 2016 | Eurekahedge


Hedge funds were up 0.41% during the month of November, with 2016 year-to-date returns coming in at 3.53%. Meanwhile, underlying markets as represented by the MSCI AC World Index (Local) gained 2.88% in November with its 2016 year-to-date returns at 4.88%. Roughly 56% of underlying constituent funds for the Eurekahedge Hedge Fund Index were in positive territory this month, with majority of them being long/short equities mandated. North American hedge fund managers posted the best returns among regional peers this month, with gains of 2.28% while among strategic mandates, event driven hedge funds led the tables with gains of 1.85%.

Event Driven Strategies Outshine Peers in 2016

December 2016 | Eurekahedge


Event driven and their sub-group of distressed debt hedge fund strategies account for almost 12% of the global hedge fund assets under management, standing at US$266.5 billion as of November 2016. Despite posting the best returns among hedge fund strategic mandates in 2016 (distressed debt and event driven strategies are up 11.89% and 8.15% respectively which compares with average global hedge fund gains of 3.50%), the two strategies have seen investor redemptions for most of 2016. Event driven strategies saw outflows of US$13.5 billion in 2016, while distressed debt hedge funds recorded redemptions of US$2.1 billion which compares with industry wide investor redemptions of US$28.2 billion for the year.

2016 Overview: Key Trends in European Hedge Funds

December 2016 | Eurekahedge


European hedge fund managers have had a challenging year in 2016, with redemption activity picking up for the past six consecutive months. Year-to-date investor redemptions stood at US$7.4 billion as of October 2016, a stark contrast from stronger investor allocations totalling US$32.4 billion over the same period last year.

European Hedge Funds Infographic December 2016

December 2016 | Eurekahedge


Eurekahedge’s European hedge funds infographic sums up the industry as at December 2016. Find out more about European 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.

Interview with Mitchell Presnick, Director and Partner at Marco Polo Pure Asset Management Ltd

December 2016 | Eurekahedge


Mitchell Presnick is Director and Partner with Marco Polo Pure China Fund. Mr. Presnick holds an MBA (1999) from the Rutgers Graduate School of Business in Newark, New Jersey, a graduate diploma in Chinese language (1990) from Peking University in Beijing, and a BBA (1988) from James Madison University in Harrisonburg, Virginia. He is fluent and literate in Mandarin Chinese. Mitch is a prominent American business commentator in Asia and a permanent resident of Hong Kong. He brings over 28 continuous years on-site China business experience.

Asset Flows Update

November 2016 | Eurekahedge


The Eurekahedge Hedge Fund Index declined 0.48% in October outperforming underlying markets as represented by the MSCI World Index which was down 1.38% over the same period. Among regional mandates, Latin American managers led the table, up 4.07% during the month followed by Japan managers who gained 2.28%. Across strategies, distressed debt hedge funds led the table with gains of 1.96% followed by fixed income hedge funds which were up 0.51%.

Hedge Fund Performance Commentary

November 2016 | Eurekahedge


Hedge funds witnessed their first decline in seven months, down 0.48% in October. Despite being in the red this month, hedge funds have outperformed underlying markets, with the MSCI AC World Index (Local) losing 1.38% over the same period. While the US Presidential Elections loomed in the background, markets moved in the rhythm of a series of economic data releases as well as central bank meetings this month.

CTA/Managed Futures Strategies Continue to Attract Investor Capital

November 2016 | Eurekahedge


CTA/managed futures hedge fund strategies account for almost 11% of the global hedge fund assets under management (AUM), accounting for US$250.3 billion as of October 2016. While the global hedge fund industry has seen redemptions of US$16.6 billion in 2016; the highest on record since 2009, CTA/managed futures strategies have continued to attract investor capital for the second consecutive year in a row. The strategy has seen net investor allocations of US$12.2 billion in 2016, following capital inflows of US$29.0 billion in 2015. Average index returns for the strategy have been muted over the last two years (this following their strong showing in 2014 when the Eurekahedge CTA/Managed Futures Hedge Fund Index was up 9.62%), the prospect of uncorrelated returns, both to traditional and hedge fund mandates adds much to the appeal of CTA/managed futures hedge funds in an investor’s portfolio.

2016 Key Trends in Latin American Hedge Funds

November 2016 | Eurekahedge


The US$54.9 billion Latin American hedge fund industry grew by US$0.6 billion over the past nine months. Though a modest figure, this represents the industry’s first year-to-date asset expansion since 2013. Much of this year’s asset expansion is attributed to positive performance-based figures totalling US$1.4 billion while investors redeemed US$0.8 billion from the industry.

Interview with Vincent Lam, Chief Investment Officer, at VL Asset Management

November 2016 | Eurekahedge


VL Asset Management Limited was founded in 2009 in Hong Kong by veteran investor Vincent Lam and ex-lawyer Adrian Wong.  The company, being a home-grown boutique house though, has strengthened its team from two to nine members in less than seven years. Its flagship, VL Champion Fund, with a long-short equity mandate, was launched in mid-2009 and has been up and running with a loyal and steadily-growing investor base. VLAM launched an authorised fund VL China Fund in August 2015. Vincent Lam shares with Eurekahedge the fund's investment strategy.

Latin American Hedge Funds Infographic November 2016

November 2016 | Eurekahedge


Eurekahedge’s Latin American hedge funds infographic sums up the industry as at November 2016. Find out more about Latin 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.

Interview with David Liebowitz, Managing Partner at Aroya Capital LP

November 2016 | Eurekahedge


David Liebowitz has been an investment professional for over 33 years. Prior to founding Aroya Capital LP, David served Bear Stearns in a number of capacities from 1983 to 2005. The common thread of his experience was his involvement in proprietary trading during his entire 22 years career at Bear – initially Risk Arbitrage and then Convertible Arbitrage for many years. Over the course of his career at Bear he managed as much as $4 billion of proprietary capital as well as $1.4 billion of client assets. In 1993 David was elected to the Board of Directors of The Bear Stearns Companies, Inc., serving as a director until 2001.

Asset Flows Update

October 2016 | Eurekahedge


The Eurekahedge Hedge Fund Index was up 0.48% in September while underlying markets as represented by the MSCI World Index grew 0.19% over the same period. Among regional mandates, Japan managers led the table up 1.27% during the month followed by North American managers who were up 0.93%. Across strategies, distressed debt hedge funds led the table with gains of 1.12% followed by event driven hedge funds with 0.86%.

Hedge Fund Performance Commentary

October 2016 | Eurekahedge


Hedge funds were up 0.48% in September outperforming underlying markets, as represented by the MSCI AC World Index (Local) which gained 0.19% during the month. The trading scene was affected by a series of macro data, central bank meetings, OPEC and to a lesser extent the US Presidential debate. Strong jobs data throughout the past couple of month added to the rate hike anticipation at the Fed meeting, which however, ended with no action.

Long/Short Equity Strategies Struggle Led by Weaknesses in Europe

October 2016 | Eurekahedge


Long/short equity hedge fund strategies account for almost 36% of the global hedge fund asset under management (AUM), accounting for US$801.7 billion as of September 2016. Following a difficult start to the year, the strategy is on its way to recovery following four consecutive months of positive returns with the Eurekahedge Long Short Equity Hedge Fund Index up 2.47% for the year. However, given the challenging market environment since end 2013, long/short equity manager have posted low single digit returns over the last three years – up 3.69% in 2014, 3.04% in 2015 and 2.47% September 2016 YTD; a development that has slowed investor allocations into the strategy and contributed in part to a decline in the net growth activity (launches less closures). The outlook remains challenging for the moment, and the fourth quarter holds much in store from the outcome of the US elections to the Fed’s signalling on the pace of future rate hikes that could potentially limit the upside for the stra

2016 Key Trends in North American Hedge Funds

October 2016 | Eurekahedge


The US$1.49 trillion North American hedge fund industry has been resilient amid challenging market conditions, with the trading environment over the course of the year being a rather exciting albeit nerve-wrecking one so far. The industry’s assets under management (AUM) grew by US$19.1 billion during the year largely on the back of performance-driven gains (US$14.3 billion). Investor inflows were somewhat lacklustre this year with US$4.8 billion of allocations to date, down from inflows of US$40.5 billion over the same period in 2015.

North American Hedge Funds Infographic October 2016

October 2016 | Eurekahedge


Eurekahedge’s North American hedge funds infographic sums up the industry as at October 2016. Find out more about North American hedge funds assets under management (AUM), asset flows into strategic and regional mandates, launches and closures, fund size and geographic AUM, head office locations and the best and worst performances of the year.

Asset Flows Update

September 2016 | Eurekahedge


The Eurekahedge Hedge Fund Index was up 0.03% in August while underlying markets as represented by the MSCI World Index gained 0.48% over the same period. Among regional mandates, Asia ex-Japan managers led the table, up 1.26% during the month followed by Latin American managers who were up 0.71%. Across strategies, distressed debt hedge funds led the table 1.71% returns followed by event driven hedge funds with 1.42%.

Hedge Fund Performance Commentary

September 2016 | Eurekahedge


Hedge funds were up a marginal 0.03% in August, with much of the weakness being led by underlying CTA/managed futures and macro mandated hedge funds. Meanwhile, underlying markets, as represented by the MSCI AC World Index (Local) grew 0.48%. While August was a relatively quiet month, central bank actions dominated the trading scene especially towards the end of the month. This affected much of the trend-following and commodity-focused hedge funds, both of which are sub-sets of the broader CTA/managed futures strategy.

Volatility Hedge Funds – The Dark Knights of the Industry

September 2016 | Eurekahedge


Volatility investing hedge funds are a much overlooked segment of the hedge fund industry - niche players who invest exclusively in volatility as either a standalone alpha generating strategy or as part of a diversified portfolio seeking to provide downside protection during periods of elevated market stress. The strategy though is ripe for a comeback, and a source of much added value for investors seeking to hedge their portfolios during uncertain times and possibly flirt with the notion of direct exposure to volatility as an asset class in its own right. The report which follows will review the performance of the CBOE Eurekahedge Volatility Indexes over the years and the added benefits that can arise from increasing allocations towards volatility investing strategies.

2016 Key Trends in Asian Hedge Funds

September 2016 | Eurekahedge


Global financial markets have been peppered with a series of events adding to volatile conditions in the trading environment. Within Asia, monetary stimulus continues to be a main theme as global events weigh in on investor sentiment. The fallout from Brexit; though largely contained for the moment, and the US Federal Reserve’s unconfident march towards policy normalisation will be much watched for as 2016 draws to a close.

Asian Hedge Funds Infographic September 2016

September 2016 | Eurekahedge


Eurekahedge’s Asian hedge funds infographic sums up the industry as at September 2016. Find out more about Asian hedge funds assets under management (AUM), asset flows into strategic and regional mandates, launches and closures, fund size and geographic AUM, head office locations and the best and worst performances of the year.

Interview with Ivan Popovic, Managing Director and Nicolas Mirjolet, Chief Investment Officer at Tolomeo Capital AG

September 2016 | Eurekahedge


Ivan Popovic is a founding partner of Tolomeo Capital and serves as the company’s Managing Partner. At Tolomeo Capital, Ivan oversees the day-to-day running of the business. Nicolas Mirjolet is a founding partner and the Chief Investment Officer (CIO) of Tolomeo Capital. In this function, he is responsible for portfolio management and the daily trading operations of Tolomeo’s investment products.

Asset Flows Update

August 2016 | Eurekahedge


The Eurekahedge Hedge Fund Index was up 1.52% in July while underlying markets as represented by the MSCI World Index gained 4.18% over the same period. Among regional mandates, Latin American managers led the table, up 4.44% during the month followed by Asia ex-Japan managers who grew 2.79%. Across strategies, relative value hedge funds led the table with gains of 2.51% followed by long/short equities hedge funds which were up 2.34%.

Hedge Fund Performance Commentary

August 2016 | Eurekahedge


Hedge funds gained for the fifth consecutive month in July, up 1.52% while underlying markets, as represented by the MSCI AC World Index (Local) gained 4.18%. Roughly 73% of the underlying constituent hedge funds for the Eurekahedge Hedge Fund Index were in positive territory this month thanks to a broad-based rally in global equity markets and an improving investor risk appetite post-Brexit. Markets were a little perturbed by a series of central bank meetings. Bund yield barely moved after the ECB meeting left current measures unchanged, signalling that investors are still anticipating another round of ECB stimulus in the coming months.

Commodity Focused Hedge Funds Outshine Peers in 2016

August 2016 | Eurekahedge


The&nbsp;<em>Eurekahedge Commodity Hedge Fund Index</em>&nbsp;is an equal-weighted index which tracks the performance of underlying hedge fund managers who invest exclusively into commodities and commodities-related instruments. In our analysis, the&nbsp;<em>Eurekahedge Commodity Hedge Fund Index</em>&nbsp;was up 0.77% in July (9.19% July year-to-date) in what turned out to be a good month for managers allocating to precious metals, energy and softs. Underlying managers reported impressive gains made from the rally in precious metals in July as gold climbed during the latter half of the month, on the back of a weakening greenback and lacklustre GDP figures coming from the US. Short positions in crude oil proved to be profitable as concerns of a sat

2016 Key Trends in Global Hedge Funds

August 2016 | Eurekahedge


The first half of 2016 was certainly eventful as financial markets anticipated and reacted to global developments. Emerging market assets performed strongly towards the second quarter of the year as oil and commodity prices showed signs of recovery. Events in the developed world have also added to heightened volatility in the markets, especially in the days leading up to the Brexit referendum with investors fleeing to safe haven assets.

Global Hedge Funds Infographic August 2016

August 2016 | Eurekahedge


Eurekahedge’s global hedge funds infographic sums up the industry as at August 2016. Find out more about global hedge funds assets under management (AUM), asset flows into strategic and regional mandates, launches and closures, fund size and geographic AUM, head office locations and the best and worst performances of the year.

Interview with Mason Chau, Chief Investment Officer of OIL Assets International Limited

August 2016 | Eurekahedge


Mason Chau, Chief investment officer, BBA, Msc (E-commerce), CPA., FCCA, is the founder of OIL Assets International Limited. Prior to this, he has held senior position in BZW Asia Limited and HSBC Securities Limited. Mason also has extensive experience in direct investment and private equity.

Asset Flows Update

July 2016 | Eurekahedge


The Eurekahedge Hedge Fund Index was up 0.63% in June while underlying markets as represented by the MSCI World Index fell 1.38% over the same period. A weak global macroeconomic outlook coupled with strong headwinds in the aftermath of Brexit proved to be a challenging environment for managers.

Hedge Fund Performance Commentary

July 2016 | Eurekahedge


Hedge funds successfully traded their way around an overwhelming month in June and were up 0.63% while underlying markets as represented by the MSCI World Index lost 1.38% during the month. A number of managers had lowered their overall risk exposure in the lead up to Brexit, and were quick to reverse their positions and capitalise on winning trends that emerged subsequently such as the rally in the yen and emerging currency pairs vis a vis US dollar; and short positions in the pound which declined to historic lows.

Eurekahedge FX Hedge Fund Index Strategy Profile

July 2016 | Eurekahedge


The Eurekahedge FX Hedge Fund Index tracks the performance of dedicated currency investing hedge funds in the spot, futures and forward markets utilising both systematic and discretionary overlays and investing across all of major, minor and exotic currency pairs. The Eurekahedge FX Hedge Fund Index was up 0.10% in June in what turned out to be a volatile month for global currencies. Underlying managers reported losses on their long USD versus emerging market currency pairs’ positions in the earlier part of the month as disappointing US non-farm payroll data pushed back expectations of a summer rate hike in the US. Short positions in the Rand proved to be costly for managers as South Africa avoided an expected ratings downgrade ...

2016 Key Trends in European Hedge Funds

July 2016 | Eurekahedge


The European hedge fund industry continues to gain traction among investors despite market turbulence dominating the trading landscape since the start of the year. Investor allocations into the industry stood at US$13.4 billion over the last five months of 2016, up US$4.2 billion compared to allocations over the same period last year. Manoeuvring volatile markets has proved to be a challenge with managers posting year-to-date performance-based losses of US$6.8 billion, compared to gains of US$14.3 billion over the same period last year.

European Hedge Funds Infographic July 2016

July 2016 | Eurekahedge


Eurekahedge’s European hedge funds infographic sums up the industry as at July 2016. Find out more about European hedge funds assets under management (AUM), asset flows into strategic and regional mandates, launches and closures, fund size and geographic AUM, domiciles, head office locations and the best and worst performances of the year.

2016 Key Trends in UCITS Hedge Funds

July 2016 | Eurekahedge


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, with certain restrictions such liquidity of the underlying assets and leverage caps to provide added transparency to investors.

UCITS Hedge Funds Infographic July 2016

July 2016 | Eurekahedge


Eurekahedge's UCITS hedge funds infographic sums up the industry as at July 2016. Find out more about UCITS hedge fund assets under management (AUM), asset flows into strategic and regional mandates, launches and closures, domiciles, head office locations, performance comparison, and the best and worst performances of the year.

Asset Flows Update

June 2016 | Eurekahedge


The Eurekahedge Hedge Fund Index gained 0.40% in May while underlying markets as represented by the MSCI World Index grew by 1.28% over the same period. Among regional mandates, North American managers posted the best returns, up 1.03% during the month followed by European and Japanese hedge funds which saw gains of 1.00% each. Across strategies, distressed debt hedge funds led the tables with gains of 1.66% followed by event driven hedge funds which were up 1.29%.

Hedge Fund Performance Commentary

June 2016 | Eurekahedge


Hedge funds were up 0.40% in May while underlying markets, as represented by the MSCI World Index gained 1.28% over the same period. Managers held their ground despite tight markets in May with mid-month reversals across commodities, and weaker equity performance in developing markets affecting the trading scene. Risk appetite somewhat sustained during the month with oil prices remaining resilient going into May. Distressed debt hedge funds were a clear lead among strategic mandates, up 1.66% while North American managers led regional mandates, up 1.03%. Among profitable moves for managers were long developed markets consumer stocks, some into European consumer and information technology names.

2016 Key Trends in Latin American Hedge Funds

June 2016 | Eurekahedge


The first four months of 2016 saw some renewed investor interest into the Latin American hedge fund space. Total assets for Latin American hedge funds grew US$0.8 billion as of April 2016 year-to-date, roughly twice the level of asset growth seen over the same period last year. The Eurekahedge Latin American Long Short Equities Hedge Fund Index and Eurekahedge Latin American Multi-Strategy Hedge Fund Index were up 11.21% and 8.53% respectively as of April 2016 year-to-date. Investor optimism in the region was evident as major Latin American equity indices rallied at the start of the year. The MSCI Latin America Index was up 15.24% in 2016 year-to-date as resilient oil and commodity prices have helped in pushing up the valuations of underlying assets.

Latin American Hedge Funds Infographic June 2016

June 2016 | Eurekahedge


Eurekahedge’s Latin American hedge funds infographic sums up the industry as at June 2016. Find out more about Latin American hedge funds assets under management (AUM), asset flows into strategic and regional mandates, launches and closures, lifespan of active and obsolete funds, and the best and worst performances of the year.

Asset Flows Update

May 2016 | Eurekahedge


The Eurekahedge Hedge Fund Index gained 0.88% in April while underlying markets as represented by the MSCI World Index gained 0.67% over the same period. Among regional mandates, Latin American managers posted the best gains, up 3.93% during the month followed by North American hedge funds which saw gains of 1.25%. Across strategies, relative value hedge funds led the table with gains of 1.96% followed by event driven hedge funds which were up 1.34%.

Hedge Fund Performance Commentary

May 2016 | Eurekahedge


Hedge funds outperformed underlying markets in April and were up 0.88% during the month while underlying markets as represented by the MSCI World Index gained 0.67%. Emerging market managers continued to perform well during the month supported by resilient oil and commodity prices which helped to inject some investor optimism. A confluence of factors has helped oil gain some support despite ineffective talks between OPEC members while rather encouraging Chinese macro data and stimulus measures have also aided in providing a better outlook for the Chinese economy, resulting in the climb in prices across the commodity space.

Funds of Hedge Funds Infographic May 2016

May 2016 | Eurekahedge


Eurekahedge’s funds of hedge funds infographic sums up the industry as at May 2016. Find out more about funds of hedge funds assets under management (AUM), asset flows into strategic and regional mandates, launches and closures, lifespan of active and obsolete funds, and the best and worst performances of the year.

Interview with Cy Jacobs, Co-Founder and Fund Manager, at 36ONE Asset Management

May 2016 | Eurekahedge


36ONE Asset Management is an independent owner-managed specialist investment manager based in Johannesburg, South Africa. Our investment philosophy is to focus on fundamental analysis while using a macro overlay to understand which themes complement our fundamental approach and for risk management purposes with the aim of generating above-average real returns. We continually manage our investments in a flexible manner to reflect changing market conditions. Cy Jacobs shares with Eurekahedge the fund's investment strategy.

Derivatives and Hedging: Speculation Tools or Effective Risk Management in a Volatile Market?

May 2016 | Danial Idraki, Islamic Finance News


Derivatives and hedging are tools that remain necessities in the financial system as a way to manage risks that might arise from uncertainties and price fluctuations in the market, although it remains a contentious subject in Islamic finance due to some of the features in the instruments that invite speculative trading. Views are often split from a Shariah standpoint, given that excessive uncertainty and speculation are concepts not permissible in Shariah compliant transactions.

Asset Flows Update

April 2016 | Eurekahedge


The Eurekahedge Hedge Fund Index gained 1.33% in March while underlying markets as represented by the MSCI World Index declined 5.47% over the same period. Among regional mandates, Latin American managers posted the best gains, up 4.85% during the month followed by Asia ex-Japan hedge funds which saw gains of 4.78%. Across strategies, event driven hedge funds led the table with gains of 3.16% followed by distressed debt hedge funds were up 3.03% - an impressive rebound after their four-month losing streak.

Hedge Fund Performance Commentary

April 2016 | Eurekahedge


Hedge funds recovered part of their losses from earlier in the year and were up 1.33% in March as underlying markets represented by the MSCI World Index gained 5.47% in what shaped up to be a positive month for global markets. The Fed's decision to roll back further on its scheduled interest rate hikes for 2016, coupled with rising oil prices and monetary easing in China provided much need relief for the markets. As of end-Q1 2016, hedge funds are down 0.37%, ahead of underlying markets as the MSCI World Index posted losses of 1.97%.

2015 Overview: Key Trends in Global Hedge Funds

April 2016 | Eurekahedge


The world economy had a shaky start in 2016 with investors flocking to safe haven assets amid a volatile market environment. The global hedge fund industry’s asset base contracted US$20.1 billion as of February 2016 year-to-date, with performance-driven losses a main contributor to this contraction. Performance-based losses stood at US$16.6 billion in the first two months of 2016 alone, while investor outflows of US$3.5 billion were recorded. The assets under management (AUM) of the global hedge fund industry currently stand at US$2.22 trillion, managed by a total of 11390 hedge funds. Going into 2016, further easing seems to be a main theme as central bankers worldwide have largely adopted accommodative monetary policies in an attempt to re-energise the current lethargy of the world economy.

Global Hedge Funds Infographic April 2016

April 2016 | Eurekahedge


Eurekahedge’s global hedge funds infographic sums up the industry as at April 2016. Find out more about hedge fund assets under management (AUM), asset flows into strategic and regional mandates, launches and closures, lifespan of active and obsolete funds, and the best and worst performances of the year.

Interview with Dr. Leung Wing Cheong, CEO and CIO of InnoFusion Capital Management Limited, for InnoFusion Asia Multi-Strategy Fund

April 2016 | Eurekahedge


InnoFusion Capital Management runs a multi-strategy fund focused in relative value/arbitrage strategies. The fund invests in a wide range of asset classes and financial products, including equities, fixed income, convertible bonds, commodities and derivatives. During the last 10 years, the fund return 14.35% per annum with very low correlation to various markets and asset classes. Dr. Leung Wing Cheong, CEO and CIO shares with Eurekahedge the fund's investment strategy.

Interview with Hyung-Kyu Choi, CEO & CIO of QUAD Capital Management

April 2016 | Eurekahedge


Hyung-Kyu Choi is the Managing Partner of Korean-based asset management firm QUAD Investment Management since January 2014. With 16 years of experience in investments, FX trading and credit analysis, Hyung-Kyu shares with us the fund's investment objective, along with his thoughts about the impact of smart watches on the industry, and display technology.

Asset Flows Update

March 2016 | Eurekahedge


The Eurekahedge Hedge Fund Index gained 0.36% in February while underlying markets as represented by the MSCI World Index declined 1.43% over the same period. Among regional mandates, Japanese managers posted the steepest loss down 3.83% during the month followed by Asia ex-Japan hedge funds which saw losses of 1.78%. Across strategies, CTA/managed futures hedge funds led the table with gains of 2.62% propped up by exposure into safe haven assets such as gold and the Bund.

Hedge Fund Performance Commentary

March 2016 | Eurekahedge


Hedge funds bounced into positive territory in February despite volatile market conditions – up 0.36% during the month, outperforming underlying markets as the MSCI World Index declined 1.43% over the same period. The global risk-on mode continued into February as investors fled to safety with yields on sovereign bonds particularly the Bund, ending lower as investors anticipate Draghi’s stimulus shots in the ECB’s coming March meeting. Over in Asia, much of the equity market weakness was led by the Japanese markets as dovish comments from Janet Yellen sent the yen appreciating mid-month.

2015 Overview: Key Trends in North American Hedge Funds

March 2016 | Eurekahedge


The North American hedge fund industry continues to grow despite muted returns in 2015 when a challenging market environment saw underlying managers post sub-zero returns in what was the worst year for managers since the lows of 2008. However, not all was doom and gloom. North American managers running Asia Pacific, broad emerging market and European mandates ended 2015 in the green, while across strategic mandate arbitrage strategies; in particular managers employing volatility based strategies post good returns.

Global Hedge Funds 2015 Overview Infographic

March 2016 | Eurekahedge


Eurekahedge’s global hedge funds 2015 overview infographic sums up the industry for the past year. Find out more about hedge fund assets under management (AUM), asset flows into strategic and regional mandates, launches and closures, lifespan of active and obsolete funds, and the best and worst performances of the year.

Interview with Christopher Peck, Partner & Portfolio Manager at Maiora Asian Structured Finance Fund

March 2016 | Eurekahedge


Christopher Peck has been in the industry with 16 years of experience in Japan and Singapore and currently focuses on resources and mezzanine debt at Maiora Asset Management.

Interview with Noemi Holecz, Risk and Portfolio Manager at Colombus Investment Management

March 2016 | Eurekahedge


Noemi Holecz, a risk and portfolio manager of Loyal Explorer Fund shares how the fund stands out from competition through advanced quantitative methodologies utilised by Colombus Investment Management.

Asset Flows Update

February 2016 | Eurekahedge


The Eurekahedge Hedge Fund Index lost 1.20% in January while underlying markets as represented by the MSCI World Index were down 5.71%. All regional mandates were down during the month as global equities faced intense sell-off pressure; much of the weakness in equity markets was led by Asian equities. Asia ex-Japan managers posted losses of 3.15% during the month followed by Japanese hedge funds which saw losses of 2.71%. Across strategies, CTA/managed futures hedge funds led the table with gains of 2.32% during the month while other strategies languished in negative territory.

Hedge Fund Performance Commentary

February 2016 | Eurekahedge


January was not a happy start to the year for hedge funds as managers witnessed a drag in performance - down 1.20% during the month, as investor panic induced strong downward pressure on equity markets leading to a sell-off and the resulting capital flight to safe havens. The MSCI World Index declined 5.71% over the same period with much of the weakness in the global equity markets being led by Asia. Indeed, all eyes were on Asia in January as developments in East Asian economies along with a tumbling oil price took centre stage and sent ripples throughout the region and beyond.

Eurekahedge 50 Index: The Year in Review and a Look Forward to 2016

February 2016 | Quantvest


The Eurekahedge 50 (EH50) index was designed to represent the exposures and experience of institutional hedge fund investors. Seeking to create a more selective benchmark reflective of diversified, institutional-quality multi-manager portfolios, Markov Processes International (MPI), in partnership with Eurekahedge, launched this unique Index in December 2014. After its first full year, the industry’s first measure of the collective performance of top hedge funds delivered better risk-adjusted returns with fewer turnovers than all-inclusive hedge fund indices.

2016 Annual Compliance Dates: SEC-Registered Investment Advisers to Private Funds

February 2016 | Elizabeth Kemery Sipes, Mark W. Weakley and Rafael E. Mendez, Bryan Cave


In 2010 the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank) eliminated the private fund adviser exemption. Prior to Dodd-Frank, many managers to hedge funds and private equity funds relied on this exemption from registration as investment advisers. After Dodd-Frank, many private investment fund managers were required to register with the U.S. Securities and Exchange Commission (SEC) as investment advisers. These investment advisers are now subject to significant on-going compliance obligations and examination by the SEC.

The Coming SEC Sweep in Hedge Funds

February 2016 | Don Andrews, Venable LLP


In 2014, the SEC formed the Private Funds Unit (PFU), a multi-disciplinary task force designed to specifically address matters that had surfaced during their initial round of ‘presence examinations’ for private funds, which commenced in 2012. Since that time, much has happened. Examinations revealed material weaknesses and deficiencies among private equity firms in the areas of valuation, performance reporting, disclosure to limited partners and conflicts of interest. The staff of the SEC has commenced enforcement actions against a number of private equity firms and indicated that the industry can expect additional enforcement actions related to the above issues.

Asset Flows Update

January 2016 | Eurekahedge


The Eurekahedge Hedge Fund Index lost 0.70% in December while underlying markets as represented by the MSCI World Index were down 2.23%. The performance of regional mandates was mixed during the month with Asia ex-Japan managers leading the table with gains of 1.45% followed by Japanese managers up 0.27%. Meanwhile the performance of European managers was flat, while Latin American and North American hedge funds languished, down 0.60% and 0.94% respectively during the month.

Hedge Fund Performance Commentary

January 2016 | Eurekahedge


2015 did not end with much pomp and circumstance and was a challenging year for managers. Hedge funds ended 2015 on a low note with the Eurekahedge Hedge Fund Index down 0.70% in December, while the MSCI World Index declined 2.23% during the month. Overall for 2015, hedge funds were up 1.45% (their lowest annual return on record since 2011) amid a challenging market environment. Meanwhile underlying markets as represented by the MSCI World Index ended the year in the red, down 0.48%.

2015 Overview: Key Trends in Asian Hedge Funds

January 2016 | Eurekahedge


Market calamity took Asian hedge funds on a rough ride in 2015, and despite facing financial storms, Asian hedge funds have recorded positive assets under management (AUM) growth in the last quarter of 2015 with the industry’s total asset base growing by US$9.5 billion as of November 2015 year-to-date, bringing the total size of the industry to reach US$171 billion, managed by 1,423 hedge funds.

The New Section 4(a)(7) Exemption for Private Resales of Securities: What Does it Mean for Hedge Funds?

January 2016 | Scott C. Budlong, Richards Kibbe & Orbe LLP


On December 4, 2015, President Obama signed into law the Fixing America’s Surface Transportation Act (the ’FAST Act’). The legislation primarily related to the federal transportation matters, but lurking toward its end is an amendment to the Securities Act of 1933 (the ‘Securities Act’) establishing a new registration exemption for private resales of securities. The exemption is embodied in new §4(a)(7) of the Securities Act. It is largely based on (but does not replace) the so-called ‘Section 4(a)(1-½) exemption’ that securities lawyers have developed over time under the SEC’s eye.

Asset Flows Update

December 2015 | Eurekahedge


The Eurekahedge Hedge Fund Index continues to gain ground in Q4, ending with an increase of 0.77% during the month of November. Meanwhile underlying markets as represented by the MSCI World Index were up 0.38%. All hedge fund regional mandates posted positive returns during the month with most equity markets ending the month in positive territory.

Hedge Fund Performance Commentary

December 2015 | Eurekahedge


Hedge funds gained for the second consecutive month up 0.77% in November outperforming underlying markets as represented by the MSCI AC World Index All Core, which gained 0.38% during the month. November was dominated by the theme of a US rate hike later in the year, along with the European Central Bank's (ECB) dovish stance regarding further easing in the Eurozone. The latter has been to some extent realised earlier during the month when the ECB decided to cut deposit rates even further, adding to their menu an ever expansive array of negative yielding bonds on offer from countries otherwise plagued with anaemic growth. It would be interesting to see how this easy credit and the simultaneous calls for reforms aka austerity will lead the Eurozone onto firmer grounds.

2015 Overview: Key Trends in European Hedge Funds

December 2015 | Eurekahedge


The European hedge fund industry has been gaining ground despite the challenging circumstances in the Eurozone region. Given the strong recovery posted by European hedge funds, March 2014 saw the industry’s assets under management (AUM) breach past its October 2007 pre-crisis AUM of US$478.1 billion. The situation in Greece earlier this year has not deterred AUM growth in the region with total assets climbing steadily to reach US$525.9 billion as at October 2015, managed by a total of 3,998 hedge funds. On a year-to-date basis, the total AUM of European hedge funds has grown by US$39.1 billion, largely on the back of strong investor flows which have account for the bulk of this growth.

Interview with Larry Jones, Head of Portfolio Management, Alternative Solutions at AXA Investment Managers

December 2015 | Eurekahedge


AXA Investment Managers is an active, long-term, global, multi-asset investor focused on enabling more people to harness the power of investing to meet their financial goals. By combining investment insight and innovation with robust risk management, AXA IM has become the chosen investment partner of investors worldwide. Eurekahedge speaks to Larry Jones, Head of Portfolio Management, Alternative Solutions to find out more.

Interview with Tom Lin, Founder & Portfolio Manager at MMA Pan Asia Fund Management LLC

December 2015 | Eurekahedge


Founder and Portfolio Manager Tom Lin has extensive experience in the Asian equity markets as an analyst, investor, and an investment banker. Prior to founding the firm, Mr. Lin managed and launched technology equity sales units for Merrill Lynch, Lehman Brothers, and Deutsche Bank, as well as held a sector analyst role at Anthion Capital. Mr. Lin lived and worked in both Taiwan and Hong Kong for a combined 20 years.

New New Guidance Regarding Barrier Options

December 2015 | John Kaufmann, Greenberg Traurig


In a recently released Chief Counsel Advice Memorandum (the “CCA”), the Internal Revenue Service broadened its scrutiny of so-called ‘barrier option’ transactions, which tax-payers have used to defer recognition of income and to convert ordinary income and short-term capital gain to long-term capital gain. The government had previously announced that it would scrutinise these transactions in guidance released in 2010 and in July of this year. The CCA is consistent with the previous guidance, and expands upon it in two ways:

Asset Flows Update

November 2015 | Eurekahedge


The Eurekahedge Hedge Fund Index ended its four month losing streak, gaining 1.33% in October 2015. Underlying markets as represented by the MSCI World Index were also up this month, gaining 7.22%. Returns across all regional mandates were positive this month as the market rebounded in October.

Hedge Fund Performance Commentary

November 2015 | Eurekahedge


Hedge funds ended their four month losing streak, gaining 1.33% in October as most major equity markets ended the month in positive territory. Underlying markets as represented by the MSCI World Index posted strong gains during the month, up 7.22%. Central bank policies remained divergent with the European Central Bank (ECB) and the Bank of Japan (BoJ) rather dovish, reiterating their intent to meet inflation targets as part of their broader strategy to support growth in their respective economies. On the other hand, the Fed appears to be hinting at a long overdue rate hike in December which seems likely given the encouraging employment numbers coming out from the US as well as the stabilising outlook overseas - mainly China which appears to have weathered the worst for the moment.

2015 Overview: Key Trends in Latin American Hedge Funds

November 2015 | Eurekahedge


Latin American hedge funds have been experiencing dwindling interest from investors over the last few years as they cope with redemption pressure and stagnating performance-based gains compared to other regional mandates. The global economic slump throughout 2015 has not spared the Latin American economies - commodity-dependent countries in the region were affected by the slowing growth of export destination countries such as China and the US. The fall in commodity and oil prices and the weakening of the real and peso are also affecting the ability of companies to fulfil their debt obligations, while political instability continues to affect the region. Meanwhile, depending on the Fed’s interest rate hike timing, capital outflows from the Latin American region could put them in a worse shape than before.

Interview with Alex Goh, CFA, Investment Manager of Oak Spring Alpha Fund

November 2015 | Eurekahedge


With 20 years of experience in wealth management, the CEO of Abacus Asia Management, Alex Goh discusses the fund's origins and strategy, as well as overcoming challenges faced in the Asian markets.

Asset Flows Update

October 2015 | Eurekahedge


The Eurekahedge Hedge Fund Index fell into negative territory this month, down 0.58% in September 2015, though outperforming underlying markets as represented by the MSCI AC World Index All Core which lost 3.60% during the month. Returns across all regional mandates were mixed as market and macroeconomic themes are starting to shape investor sentiments globally

Hedge Fund Performance Commentary

October 2015 | Eurekahedge


Hedge funds fell for the fourth consecutive month in September down 0.58% though still outperforming underlying markets as represented by the MSCI AC World Index All Core, which declined 3.60% during the month. Equity markets continued their slide this month as markets are still reeling from the Chinese equity market swing over the past months. Further to that, soft PMI data from China and the Fed’s vacillation over its long overdue rate hike added to the risk-off sentiment in the market while a commodity induced deflationary environment will continue to be a source of worry for emerging markets as central banks have little room to manoeuvre given the existing low interest rate environment.

2015 Key Trends in North American Hedge Funds

October 2015 | Eurekahedge


The North American hedge fund industry grew by US$54.2 billion as of 2015 year-to-date, on the back of strong investor inflows which account for roughly two-thirds of total asset growth in the region. Despite mixed economic performance in the US during the year, investor inflows stood at US$34.5 billion while performance-driven gains stood at US$19.8 billion year-to-date, bringing the total assets under management (AUM) of the North American hedge fund industry to US$1.48 trillion managed by 5,432 hedge funds as at August 2015.

Asset Flows Update

September 2015 | Eurekahedge


The Eurekahedge Hedge Fund Index fell into negative territory this month, down 1.81% in August 2015, though outperforming underlying markets as represented by the MSCI World Index which was down 6.66% during the month. Returns across all regional mandates were dented this month as investors grew cautious of the uncertain economic outlook.

Hedge Fund Performance Commentary

September 2015 | Eurekahedge


Hedge funds fell into negative territory this month – down 1.81%, though comfortably outperforming underlying markets as the MSCI World Index lost 6.66%. Equity markets were down across the board this month with Chinese equity markets posting double-digit losses in the aftermath of the Chinese stock market correction. Disappointing macroeconomic data from China pointed towards a less optimistic outlook for Asia Pacific’s largest economy despite aggressive government intervention to ensure the country’s liquidity cushion is maintained. Fears of a financial contagion led equity markets down this month as investors were wary of a spill over from China’s volatile markets.

2015 Key Trends in Asian Hedge Funds

September 2015 | Eurekahedge


The Asian hedge fund industry grew steadily in 2015 with the asset base growing at twice the rate seen over the same period last year. With strong investor inflows during the year, total assets under management (AUM) increased by US$16.1 billion in July year-to-date, bringing the total size of the Asian hedge fund industry to US$177 billion managed by 1,413 hedge funds. In this month’s key trends in Asian hedge funds report, we include a feature on Greater China, a region which has made headlines since late-2014. Chinese authorities have sought active intervention in the markets with a series of interest rate cuts, municipal debt-swap programs and ease of banking restrictions through reserve ratio cuts and loan deposit ratios in an attempt to inject the Chinese economy with further liquidity. As such, Greater China mandated hedge funds have seen strong growth in the beginning of the year as the Chinese equity markets rallied on the backs of relaxed capital controls and improving infra

Special Report: Greater China Hedge Funds

September 2015 | Eurekahedge


Along with this month’s key trends in Asian hedge funds report, we include a feature on Greater China, a region which has made headlines since late-2014. Chinese authorities have sought active intervention in the markets with a series of interest rate cuts, municipal debt-swap programs and ease of banking restrictions through reserve ratio cuts and loan deposit ratios in an attempt to inject the Chinese economy with further liquidity.

Asset Flows Update

August 2015 | Eurekahedge


The Eurekahedge Hedge Fund Index rebounded this month, up 0.27% in July 2015, while the MSCI World Index was up 1.34%. Returns for Asia ex-Japan were dented this month, down 2.60% as the end of the Chinese equity market euphoria has depressed gains for hedge funds with Greater China exposure. However, European, North American and Japanese equity markets have bounced back from losses in the previous month with developed market hedge fund mandates posting good gains.

Hedge Fund Performance Commentary

August 2015 | Eurekahedge


Hedge funds bounced into recovery this month - gaining 0.27%, though still underperforming underlying markets as the MSCI World Index gained 1.34%. Equity markets were mostly up this month with the US, European and Japanese equity markets recovering from last month’s losses, while the Chinese equity markets sell-off seemed to show signs of bottoming out following active intervention by the Chinese authorities. Asia ex-Japan suffered their second consecutive month of losses, down 2.60% as its heavyweight Greater China funds were down 8.49%.

2015 Key Trends in Global Hedge Funds

August 2015 | Eurekahedge


The global hedge fund industry has seen a steady increase in its asset growth after experiencing uninterrupted redemption pressure in the second half of 2014, with asset growth totalling US$93.0 billion for the first half of 2015. Much of this growth is attributed to excellent performance-based gains which account for US$51.7 billion, together with continued investor inflows accounting for US$41.3 billion.

Private Equity and Hedge Fund Managers Take Caution – Proposed Treasury Regulations Threaten Management Fee Waivers

August 2015 | Karl P. Fryzel, Rebecca Melaas and Michael J. Conroy, Locke Lord LLP


On July 23, 2015, the Internal Revenue Service (IRS) issued long-awaited proposed regulations discussing the taxation of management fee arrangements commonly used by private equity funds and their management. The proposed regulations address the tax treatment of disguised payments for services under Section 707(a)(2)(A) of the Internal Revenue Code (the Code) where a partner has rendered services to a partnership in a capacity as other than a partner. By specifically classifying certain fee arrangements, including particular carried interest mechanisms, as disguised payments for services, the proposed regulations target purportedly abusive situations where private equity funds use management fee waivers to convert services income, taxable at the ordinary rates, into income items meriting capital gain treatment.

Asset Flows Update

July 2015 | Eurekahedge


The Eurekahedge Hedge Fund Index posted its first losing month in 2015, down 1.19% in June, outperforming underlying markets as represented by the MSCI World Index which was down 2.88% during the month. Despite a strong start to the year, events in Europe and China have dented hedge fund returns in June, with overall 1H 2015 returns coming in at 3.37%, comparable to the 3.11% gain seen over the same period last year.

Hedge Fund Performance Commentary

July 2015 | Eurekahedge


After five months of consecutive gains, hedge funds posted their first monthly loss in 2015 of 1.19% in June, though comfortably outperforming underlying markets as the MSCI World Index fell 2.88% during the same month. Asia ex-Japan mandated hedge funds suffered their worst month of losses since June 2013, down 1.58% as Chinese equity markets entered into correction during the month. The Shenzhen and Shanghai Composite Indices declined by 11.78% and 7.25% during the month respectively. Talks between Greece and its creditors further overshadowed markets with European managers also posting losses of 1.13% during the month.

2015 Key Trends in European Hedge Funds

July 2015 | Eurekahedge


The European hedge fund industry has been gaining ground despite the challenging circumstances in the Eurozone region. Given the strong recovery posted by European hedge funds, March 2014 saw the industry’s assets under management (AUM) of US$478.1 billion breach past its October 2007 pre-crisis AUM. The onset of the recent Greek crisis has not deterred AUM growth in the region as AUM continued to climb steadily from 2012 onwards, reaching US$506.8 billion, managed by 4,016 hedge funds in May 2015. On a year-to-date basis, the total AUM of European hedge funds grew US$20.1 billion, largely on the back of performance-based gains which account for roughly two-thirds of the total growth in European AUM in 2015.

2015 Key Trends in UCITS Hedge Funds

July 2015 | Eurekahedge


The Undertakings for Collective Investment in Transferable Securities, or ‘UCITS’, was designed to meet investor demand for well-regulated instruments monitored by improved compliance standards in the areas of investor protection, regulation and disclosure. The demand for UCITS products grew steadily after the financial crisis as UCITS hedge funds are of interest to investors especially during times of market stress. The regulatory bodies of the EU are continually updating and improving upon the product to maintain its relevance to investors, with the UCITS V being the most recent set of regulations implemented.

Fund Administration – Opportunities for Offshore and Alternative Investment Funds

July 2015 | Aki Corsoni-Husain and Elina Mantrali, Harneys


Following the implementation of the EU Alternative Investment Fund Managers (AIFM) Directive (2011/61/EC) and associated legislation, Cyprus now lays claim to being a growth jurisdiction within the European Union for the establishment and servicing of boutique and low cost alternative investment funds based locally or offshore. The choice of fund administrator is of paramount importance to the set-up of any hedge fund and in Cyprus there are many reasons to use or establish locally-based operations.

Asset Flows Update

June 2015 | Eurekahedge


The Eurekahedge Hedge Fund Index posted its fifth consecutive month of gains for 2015 and was up 0.54% in May while underlying markets as represented by the MSCI World Index gained 0.81% during the month. On a year-to-date basis, hedge funds are up 4.49% with Asian managers leading the tables with gains of 11.44%.

Hedge Fund Performance Commentary

June 2015 | Eurekahedge


Hedge funds posted their fifth consecutive month of gains, returning 0.54% in May, while the MSCI World Index was up 0.81%. Asian hedge funds were strong performers this month with both Japanese and Asia ex-Japan hedge funds outperforming underlying markets. Japan mandated funds reported gains of 2.06%, followed by Asia ex-Japan mandated funds which were up 1.81% during the month. Indeed, good performance of Asian hedge funds was backed by strong equity market performance in the region. Japanese equity markets performed well during the month with the Nikkei 225 and the Tokyo Topix posting gains of 5.34% and 5.08% respectively.

2015 Key Trends in Latin American Hedge Funds

June 2015 | Eurekahedge


Latin American hedge funds have been facing dwindling interest from investors over the past few years as they cope with redemption pressure and stagnating performance-based gains compared to other regional mandates. Despite challenges in the Latin American hedge funds space, managers have reported gains of 2.32% in 2014, outperforming the MSCI Latin America Index which was down 4.21% last year amid a difficult market environment.

Asset Flows Update

May 2015 | Eurekahedge


Hedge funds edged higher in April to close at another record high, with the Eurekahedge Hedge Fund Index gaining 0.93%. However, hedge funds underperformed underlying markets this month as the MSCI World Index gained 1.25%. Easy monetary policy in Japan and Europe continued to push regional equities into record territory, while US market volatility rose with increasing uncertainty over the Federal Reserve’s timing of interest rate hikes and the outcome of the Greek talks.

Hedge Fund Performance Commentary April 2015

May 2015 | Eurekahedge


Hedge funds posted their fourth consecutive month of gains returning 0.93% in April, while the MSCI World Index was up 1.25%. The NYSE Composite posted gains of 1.38% as of April, despite mediocre retail sales slump figures. Investor optimism fuelled by aggressive stimulus measures by the Chinese central bank is reflected in the strong climb of the CSI 300 Index closing the month of April with gains of 17.85%. With a continued equity rally in Japan headed by Japanese pension funds and further quantitative expansion by Bank of Japan, the Nikkei 225 closed April with gains of 1.63%. Meanwhile, in Europe, the ‘Grexit’ decision has yet to be made as talks towards averting the Greek government default are still in progress.

2015 Key Trends in Funds of Hedge Funds

May 2015 | Eurekahedge


The global funds of hedge funds sector continued to face headwinds with total assets under management (AUM) of the industry in a steady decline since 2011. As of Q1 2015, the AUM of the funds of hedge funds sectors stands at US$505.9 billion managed by a total of 2,988 funds, having declined by roughly US$300 billion since their 2007 peak of US$808.7 billion.

Asset Flows Update

April 2015 | Eurekahedge


Hedge funds edged even higher in March to close at another record high, with the Eurekahedge Hedge Fund Index gaining 0.78%, outperforming underlying markets as the MSCI World Index fell 0.39%. Easy monetary policy in Japan and Europe continued to push regional equities into record territory, while US market volatility rose with increasing uncertainty over the Federal Reserve’s timing of interest rate hikes and the outcome of the Greek talks.

Hedge Fund Performance Commentary

April 2015 | Eurekahedge


Hedge funds reported their third consecutive month of gains, returning 0.78% and outperforming underlying markets as the MSCI World Index finished the month down 0.39%. Global equity markets performance was mixed, with overall gains seen in Europe and Japan while US equity markets retreated following weaker durables data signalling that perhaps the stronger dollar is finally beginning to bite into the US economic recovery. Although expected, the Federal Reserve made headlines during the month by dropping the word ‘patience’ from its statement during the month, opening up the possibility of an interest rate hike as soon as June but simultaneously reassuring investors that any rise would be gradual.

Asset Flows Update

March 2015 | Eurekahedge


Hedge funds edged even higher in February to close at another record high, with the Eurekahedge Hedge Fund Index gaining 1.57%, though underperforming underlying markets as the MSCI World Index gained 5.47% after equities surged higher during the month. A return of investor risk appetite and easy monetary policy pushed equities into record territory, while volatility faded away with investors gaining further confidence in the market’s strength.

Hedge Fund Performance Commentary for the Month of February 2015

March 2015 | Eurekahedge


Hedge funds extended their gains in the second month of 2015, returning 1.57%, although falling behind underlying markets as the MSCI World Index was up 5.47%. Global equity markets rose in unison during February with a return of investor risk appetite as the market downplayed fears of contagion from a possible ‘Grexit’; further supported by accommodative monetary policies from central banks around the world. Volatility faded away along with increased investor confidence and rising equity markets with the CBOE VIX falling from 20.97 to 13.34.

2014 Overview: Key Trends in North American Hedge Funds

March 2015 | Eurekahedge


North American hedge funds recorded excellent growth over the past 13 months despite a slowdown in the pace of expansion since the second half of 2014, raising the region’s share of assets under management (AUM) by another US$93.8 billion to approximately two thirds of the global hedge fund industry. As of January 2015, the total AUM of the North American hedge fund industry is closing in on the US$1.45 trillion mark and stands at US$1.447 trillion managed by a total of 5,267 hedge funds.

Asset Flows Update

February 2015 | Eurekahedge


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 Fund Performance Commentary for the Month of January 2015

February 2015 | Eurekahedge


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.

2014 Overview: Key Trends in Islamic Funds

February 2015 | Eurekahedge


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.

Asset Flows Update

January 2015 | Eurekahedge


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 Fund Performance Commentary

January 2015 | Eurekahedge


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.

2014 Key Trends in Global Hedge Funds

January 2015 | Eurekahedge


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.

Special Report: Indian Hedge Funds

January 2015 | Eurekahedge


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.

Hedge Fund Performance Commentary

December 2014 | Eurekahedge


Hedge funds rebounded from the prior two months’ losses, finishing the month up 1.40% , underperforming underlying markets as the MSCI World Index gained 2.34%. Global equity markets extended their rally into November after the previous month’s v-shaped recovery, with investors piling back into risky assets as October’s fall was seen as a healthy correction after a lengthy period of rising prices. Investors remained in a buoyant mood about the markets, evidenced by the CBOE VIX Index falling 4.99% during the month, with strong gains in developed economies as well as emerging Asia.

2014 Key Trends in European Hedge Funds

December 2014 | Eurekahedge


The European hedge fund industry continues its recovery amid a difficult market environment with current assets under management (AUM) standing at US$487.9 billion overseen by a population of 3,949 hedge funds. At its peak in October 2007, the European hedge fund industry’s share of global AUM was 24.9% which has since fallen to 22.9%. The total AUM of European hedge funds grew US$33.4 billion in 2014, largely on the back of new investor inflows, and is now 3.2% above its pre-crisis peak in 2007.

Interview with Wong Kok Hoi, Founder & CIO at APS Asset Management

December 2014 | Eurekahedge


With 30 years of investment experience, 6 offices around Asia and approximately US$3.2 billion in total assets, Wong Kok Hoi, Founder & CIO at APS Asset Management, discusses the challenges and opportunities of investing in Asia. Through this video interview, Wong Kok Hoi shares his investment philosophy, reasons attributed for strong performance during 2008 to 2009, the investment environment post-Madoff and the challenges hedge fund startups face in current times.

New Managed Accounts Exemption Opens Doors for Jersey Fund Managers

December 2014 | Robert Milner, James Mulholland, Daniel O’Connor Carey Olsen


A new exemption from the requirements of Jersey’s Financial Services (Jersey) Law 1998 (FS(J)L) has been introduced which will enable Jersey-regulated fund managers to service qualifying segregated managed accounts (QSMAs) without the need for further regulation in Jersey while continuing to benefit from Jersey’s 0% corporate income tax rate.

Asset Flows Update

November 2014 | Eurekahedge


Hedge funds posted their sixth month of negative returns for the year, with the Eurekahedge Hedge Fund Index down 0.27%, underperforming underlying markets as the MSCI World Index climbed 1.15% after a major worldwide selloff and subsequent recovery. In the US, the Federal Reserve completed its tapering program this month and announced that it is still on track towards normalising interest rates given its inflation and employment targets. Over in Asia, the Bank of Japan (BoJ) surprised market participants by going all out to tackle deflation and embarking on further easing, driving the yen to new lows against the greenback while sparking off another rally in the Nikkei.

Hedge Fund Performance Commentary

November 2014 | Eurekahedge


Hedge funds registered their second consecutive month of losses in October, closing the month down another 0.27%, underperforming underlying markets as the MSCI World Index gained 1.15% after a wild month. Concerns about global growth prospects amid a deflationary environment prompted a rise in investor risk aversion in the earlier half of October, sparking a global sell-off which drove the S&P 500 Index briefly into correction territory, with US 10-year treasury yields dipping below 2%. However, the market subsequently made a sharp recovery in the latter half of the month, lifted by a positive slew of economic data including strong corporate earnings and GDP numbers. Even as the Federal Reserve officially ended its quantitative easing programme this month, central banks elsewhere remain committed to tackling deflation. The ECB maintained its firm stance on an expansionary fiscal policy as growth and inflation in the region remained weak, while the Bank of Japan (BoJ) surprised financi

2014 Key Trends in Latin American Hedge Funds

November 2014 | Eurekahedge


The Latin American hedge fund industry has continued to provide remarkable performance growth and diversification for hedge fund investors over the years, with the Eurekahedge Latin America Hedge Fund Index gaining 612.00% since its inception in December 1999, comfortably outperforming the MSCI Latin America Index in the past two years. 2013 in particular was a banner year for Latin American hedge funds which returned 1.73% while the benchmark index plummeted 7.93%. The total assets under management (AUM) of the industry currently stand at US$59.1 billion, managed by a total of 397 hedge funds.

Taking Aim – the SEC’s Continued Focus on Hedge Funds

November 2014 | Nicholas Lewis, McGuireWoods LLP


“It is difficult to overstate how much the regulatory landscape for hedge fund managers has changed over the past four years.” So said Norm Champ, director of the Securities and Exchange Commission’s Division of Investment Management, in a recent speech wherein he outlined how the SEC has built on its newfound authority to regulate private fund advisers, including by taking advantage of its increased access to information and new analytical tools. As we’ve previously discussed in this newsletter, since Dodd-Frank, most investment advisers to private funds, such as hedge funds, now have to register with the SEC, thus subjecting them to SEC oversight and regulatory requirements.

Asset Flows Update

October 2014 | Eurekahedge


Hedge funds ended September flat with the Eurekahedge Hedge Fund Index returning 0.00%, outperforming underlying markets as the MSCI World Index slipped 1.86%, with market volatility picking up after the seasonal summer doldrums. In the US, investors are gearing up in earnest at the prospect of tighter monetary policy in the United States as the economic recovery continues to gain strength, with concerns continuing to remain regarding the pace of a rate rise given the mammoth challenge of unwinding the Fed’s balance sheet.

Hedge Fund Performance Commentary

October 2014 | Eurekahedge


Hedge funds were marginally negative in September, closing the month down 0.05, outperforming underlying markets as the MSCI World Index fell 1.86% on concerns over the pacing of rate hikes in the US. The protests in Hong Kong towards the end of the month also weighed in on investor sentiment, adding further selling pressure to equity markets which were already jittery at the prospect of rising rates. September saw a sharp rise in investor risk aversion, resulting in a corresponding flight to safe assets while the CBOE VIX Index rose to 16.31 during the month.

2014 Key Trends in North American Hedge Funds

October 2014 | Eurekahedge


North American hedge funds continued to record excellent growth for 2014 year-to-date, keeping up with the strong gains seen in 2013 which has raised the region’s share of assets under management (AUM) to approximately two-thirds of the global hedge fund industry. As at August 2014, the total AUM of the North American hedge fund industry has breached the US$1.4 trillion mark to stand at US$1.43 trillion managed by a total of 5,093 hedge funds.

2014 Key Trends in Funds of Hedge Funds

October 2014 | Eurekahedge


Fund of hedge funds grew slightly during the year, with the Eurekahedge Fund of Funds Index gaining 2.59% in the first eight months of 2014, coming in behind single managers who returned 3.87%. Although the industry continues to face heavy redemption pressure, assets under management (AUM) of the industry saw a small recovery for 2014 year-to-date, with AUM climbing up to US$529.3 billion managed by a total of 3,122 funds.

The New Deal: Hedge Fund Management Fees Are Subject to Social Security Taxes

October 2014 | Mark Leeds, Mayer Brown


It’s probably fair to speculate that there were significant numbers of tax aficionados (including the author of this article) among the audience for Ken Burns’ recent public television extravaganza on the Roosevelt dynasty. Unfortunately for this segment of the audience, the intersection of tax and FDR was not highlighted, with the passage of the Social Security Act receiving only scant mention. Social security taxes have risen dramatically since the enactment of the law.

Asset Flows Update

September 2014 | Eurekahedge


Hedge funds ended August in positive territory with the Eurekahedge Hedge Fund Index up 1.30% trailing the MSCI World Index which gained 2.48%, with market volatility falling across the different asset classes. In the US, the economy continues to show modest growth, prompting more speculation regarding possible revisions to the schedule for the Fed’s eventual raising of interest rates. Over in the Eurozone, inflation and growth remains weak, spurring Draghi into action to fulfil his commitment towards fighting deflation. European equities rallied in anticipation of a fresh round of quantitative easing, with regional markets ending the month largely in positive territory.

Hedge Fund Performance Commentary

September 2014 | Eurekahedge


Hedge funds rebounded strongly in August to close the month up 1.30%, trailing underlying markets as the MSCI World Index gained 2.48% on the back of modest growth figures which were driven largely by an improving outlook for the US economy. August witnessed another renewed wave of investor optimism which continued to push global equity markets higher and volatility back down.

2014 Key Trends in UCITS Hedge Funds

September 2014 | Eurekahedge


UCITS, as defined by the EU, refers to the term ‘Undertakings for Collective Investment in Transferable Securities’. They arose out of calls for an increase in the regulatory oversight of alternative investment managers, setting strict standards in the areas of investor protection, regulation and disclosure. The regulatory bodies of the EU are continually updating and improving upon the product to maintain its relevance to investors, with the most recent UCITS V set of regulations to be implemented by 17 September 2014.

Asset Flows Update

August 2014 | Eurekahedge


Hedge funds finished the month of July in the red with the Eurekahedge Hedge Fund Index down 0.10% (2.82% year-to-date), outperforming the MSCI World Index which declined 0.83% from rising geo-political tensions between Russia and the west, and concerns over Portugal’s banking sector weighed in on investor sentiment. Despite strong second quarter growth numbers in the US, anxiety continues to grow regarding the timing for the Fed’s abandonment of its zero-interest-rate policy following dissenting opinions on the issue in the recent FOMC meeting. Asian markets evaded the overall negative sentiment as healthy macro-economic numbers from China gave a boost to regional equity markets with Asian mandated hedge funds ending July on a strong note.

Hedge Fund Performance Commentary

August 2014 | Eurekahedge


Hedge funds edged lower to close 0.10% down by the end of July, following underlying markets as the MSCI World Index lost 0.83% during the same period. Equity markets around the world saw mixed gains, with the strongest performers being Asia Pacific and Latin America while North America and Europe suffered losses. North American and European stock indices actually traded higher during July despite rising geo-political tensions between Russia and the west before taking a steep dive in the closing week, finally giving way as a slew of international crises weighed in on investor sentiment, including but not limited to: Israel’s strikes on Gaza, Portuguese bank bailout, trade sanctions against Russia and the Ebola epidemic in Africa. Meanwhile in the US, strong second quarter growth numbers continue to create increasing anxiety regarding the timing for the Fed’s abandonment of its zero-interest-rate policy, with the US dollar appreciating sharply on the back of the stronger economy and exp

2014 Key Trends in Global Hedge Funds

August 2014 | Eurekahedge


Global hedge funds have maintained a level of growth comparable with the strong gains seen in 2013, with robust allocation activity totalling US$65.3 billion in the first half of 2014. Combined with excellent performance-based gains of US$40.3 billion delivered by hedge fund managers this puts the current assets under management (AUM) of the industry at a new high of US$2.12 trillion. The global hedge fund population now stands at 10,844 funds strong as at June 2014.

Widening the Scope: the SEC Turns Its Attention to Alternative Mutual Funds

August 2014 | Nicholas Lewis, McGuireWoods LLP


In a recent speech to the Practising Law Institute’s Private Equity Forum, Norm Champ, Director of the SEC’s Division of Investment Management, discussed the SEC’s increasing attention to the growth in ‘alternative mutual funds’, or open-end mutual funds that feature investment strategies more typically seen in private funds. Similar to recent speeches and discussions related to the SEC’s oversight of hedge funds, previously discussed in this newsletter last November, Champ’s speech contained useful guidance about the types of risks the SEC is monitoring in the alternative mutual fund space, but it also conveyed that the SEC will be ramping up inspection into whether investment advisers to these funds are fully complying with their duties.

Hedge Funds: All Eyes on the World Cup (and Reinsurance)

August 2014 | Martin Mankabady, Clyde & Co


The World Cup was fantastic and surpassed all expectations. It is a shame that England could not also have surpassed expectations. Amidst all the coverage of the event, there was one interesting article in the press, which did not cover the usual ground of match reports, injury updates and post-mortems of England’s or Brazil’s performance – it was an article on how hedge funds are investing in the football sector and will continue to do so. The interest generated by the World Cup is only likely to whet the appetite of such investors even further.

Asset Flows Update

July 2014 | Eurekahedge


Hedge funds ended June in positive territory with the Eurekahedge Hedge Fund Index up 1.25% and ended the second quarter of the year on a stronger note. On a year-to-date basis, hedge funds are up 3.00% while the MSCI World Index has returned 4.27% in the first half of 2014. Global markets were supported by accommodative monetary policies in June and steady gains in the US jobs market data, with the ECB initiating negative rates on bank deposits and indicating that unconventional monetary policy tools were still in reserve should the mild recovery in Eurozone falter.

Hedge Fund Performance Commentary

July 2014 | Eurekahedge


Hedge funds followed global equity markets higher to close 1.25% up by the end of June, with the Eurekahedge Hedge Fund Index reaching another new high during the month. Global equity markets saw another month of broad-based gains in June, with the strongest performers being Asia Pacific and Latin America for the emerging economies and North America for developed economies. Central bank policy remains one of supporting economic recovery, with the Fed continuing to reaffirm its stance on keeping interest rates low ‘for a considerable time’ after the end of tapering, while the ECB initiated negative rates on bank deposits in an unconventional move to raise inflation to target levels. While tensions in Ukraine appear to be easing, instability has begun brewing again in the Middle East, threatening to disrupt global oil supplies.

2014 Key Trends in Asian Hedge Funds

July 2014 | Eurekahedge


The Asian hedge fund industry struggled to duplicate their previous year’s outstanding performance amid a more volatile market environment, gaining only 0.31% but outperforming underlying regional markets by over 2% as at May 2014 year-to-date. Total assets under management (AUM) increased by US$5.2 billion during the same period, largely supported by fresh investor inflows, bringing the total size of the Asia hedge fund industry to US$152.8 billion managed by a population of 1,357 hedge funds.

Hushmail: Are Activist Hedge Funds Breaking Bad?

July 2014 | Mark D. Gerstein, Bradley C. Faris, Timothy P. FitzSimons and John M. Newell, Latham & Watkins LLP


Increasingly, some activist hedge funds are looking to sell their stock positions back to target companies. How should the board respond to hushmail?

Asset Flows Update

June 2014 | Eurekahedge


Hedge funds ended May in positive territory with the Eurekahedge Hedge Fund Index up 1.12% as global markets showed signs of stabilisation following a choppy start to the year. Moderate levels of global economic activity coupled with a supportive monetary policy outlook led to a pro-risk environment in May which saw equities and bonds appreciate while volatility levels subsided.

Hedge Fund Performance Commentary

June 2014 | Eurekahedge


Hedge funds rebounded strongly in May following April’s and March’s losses to finish the month up 1.12%, with the Eurekahedge Hedge Fund Index reaching new heights during the month. Global markets trended upwards as the Fed reiterated its dovish stance on keeping long term interest rates low in order to sustain an ongoing recovery in the US economy after GDP figures showed that the US economy had contracted in Q1 2014. Similar support built up in the Eurozone region where market participants expected the ECB to ease its monetary policy to stave of deflation worries, an expectation that was correctly realised when the ‘Draghi put’ was officially executed earlier this month in the form of negative interest rates on bank deposits.

2014 Key Trends in Latin American Hedge Funds

June 2014 | Eurekahedge


The Latin American hedge fund industry has continued to provide remarkable performance and growth for hedge fund investors over the years with the Eurekahedge Latin America Hedge Fund Index up 14.5% on an annualised basis since December 1999 and total assets under management (AUM) of the industry currently standing at US$60.8 billion. Since the start of the new millennium the Latin American hedge fund industry has witnessed tremendous growth, both in terms of number of funds and AUM.

The Billion Dollar Interview with Gabriel Srour, Hedge Funds Co-CIO at Gávea Investimentos

June 2014 | Eurekahedge


Gávea Investimentos was founded in 2003 by Arminio Fraga Neto, former Governor of the Central Bank of Brazil and former Managing Director at the Soros Fund and Luiz Henrique Fraga, former President of Latinvest Asset Management. The firm started with the launch of a Global Macro hedge fund with a focus on Emerging Markets. As the business successfully evolved, clients expressed the desire for investing in private equity in Brazil using our expertise. We then established in 2006 our Private Equity line of business which, as of May 2014, has completed 45 investments and 23 successful exits. Over the last three years, we have added two new lines of business that have been consistently expanding: Public Equities and Real Estate

AIMA Japan and Eurekahedge Survey

June 2014 | Eurekahedge


Eurekahedge was commissioned by AIMA (Japan) to conduct a survey of Japanese investors. The survey itself was conducted from end of March to April 2014 to gauge important insights into market sentiment, investment trends and key regulatory challenges facing the Asian asset management industry, with a particular emphasis on the outlook for Japan. The key findings from this survey are presented in this paper based on responses submitted by a total of 131 survey participants. As for the investment advisors who participated in the Survey, they are collectively advising and/or managing assets in excess of US$3.8 trillion.

Asset Flows Update

May 2014 | Eurekahedge


Hedge funds posted their second consecutive month of negative returns in April with the Eurekahedge Hedge Fund Index down 0.13% as global markets continued to falter amid a sluggish start to the year. On a year-to-date basis, hedge funds are up 0.78%, slightly ahead of the MSCI World Index which returned 0.75% in the first four months of the year.

Hedge Fund Performance Commentary

May 2014 | Eurekahedge


Hedge funds have been in negative territory for three out of four months this year, losing an additional 0.13% in April following the losses from March. They are still up 0.78% for the year, slightly beating the MSCI World Index which gained 0.75% during the same period. The two largest central banks in the world jittered global markets as they deliberated on monetary policy. In April, the Fed meeting clarified that with inflation still low and sluggish growth in the US, it would be a considerable period of time before the first interest rate hike, even while asset purchases continued to taper.

2014 Key Trends in Funds of Hedge Funds

May 2014 | Eurekahedge


Funds of hedge funds had a sluggish start to the year, with the Eurekahedge Fund of Funds Index gaining 0.53% in the first quarter of 2014. They enjoyed somewhat better performance during the previous year in which they reported gains of 8.15%, outperforming single managers who gained 8.07% collectively in 2013 with a higher risk factor. Although the industry continues to face heavy redemption pressure, assets under management (AUM) of the industry saw some respite in the first quarter of 2014, with AUM holding steady at US$524.5 billion managed by a total of 3,145 funds.

Hedge Funds Strategies and Shariah Compliant Short Selling

May 2014 | Irfan A Naheem, Infinity Consultants


Hedge funds are a touchy subject in Islamic finance, with scholars widely disagreeing about the Shariah compliance of various strategies. Irfan A Naheem talks us through the key concepts and controversies.

Asset Flows Update

April 2014 | Eurekahedge


Hedge funds sealed the first quarter of the year with another month of negative returns, down 0.35% in March as managers navigated through a choppy start to the year. However, strong returns posted by fund managers in the previous month saw them through with the Eurekahedge Hedge Fund Index up 0.87% in Q1 2014, outperforming the MSCI World Index which has gained 0.67% over the same period.

Hedge Fund Performance Commentary

April 2014 | Eurekahedge


Hedge funds hit another rough patch as the first quarter of 2014 drew to a close, giving back part of their February gains to finish the month down 0.35%, with the MSCI World Index returning a flat 0.04% during the month. Global markets remained largely flat-to-negative during the month as better than expected US jobs data and the reduction of the Fed’s monthly asset purchase program by another US$10 billion heightened concerns that US interest rates could rise faster than previously anticipated.

2014 Key Trends in European Hedge Funds

April 2014 | Eurekahedge


The European hedge fund industry continued its recovery amid a difficult market environment with current assets under management (AUM) standing at US$461.7 billion overseen by a population of 3,988 hedge funds. At its peak in October 2007, the European hedge fund industry’s share of Global AUM was 24.9%, which has since fallen to 22.7%. The Eurekahedge European Hedge Fund Index gained 8.39% over the past 12 months, with total AUM of European hedge funds growing US$83.5 billion during the same period, bringing it close to their 2007 high.

Asset Flows Update

March 2014 | Eurekahedge


Hedge funds posted a strong rebound in February with the Eurekahedge Hedge Fund Index up 1.79% as underlying markets rallied with the MSCI World Index gaining 3.87% during the month. Final asset flow figures for January revealed that managers incurred performance-based losses of US$4.5 billion while recording net asset outflows of US$1.7 billion as hedge funds got off to a rough start in 2014. Preliminary data for February shows that managers have posted performance-based gains of US$14.8 billion while net asset inflows stand at US$11.0 billion, bringing the current assets under management (AUM) of the industry to US$2.03 trillion – the highest level on record.

Hedge Fund Performance Commentary

March 2014 | Eurekahedge


Hedge funds bounced off the lows in January to finish the month up 1.79% as global equity markets recovered with the MSCI World Index gaining 3.87% during the month. Market sentiment held strong as weaknesses in recent US macroeconomic data were largely attributed to the weather conditions, with Fed chair Janet Yellen reaffirming the need to keep the QE tapering on track as the US economy continues its recovery. Emerging markets also showed signs of stability with the MSCI Emerging Market Index rising 2.15% during the month. Positive macroeconomic data from the Eurozone showed acceleration in manufacturing activity which provided further support to the markets, while tensions surfacing in Crimea towards the month end failed to dampen investor sentiment.

Hedge Funds in APAC: Legal and Regulatory Treatment

March 2014 | Gareth Pyburn, InsightLegal Asia Consulting


There continues to be great interest in and steady growth of hedge funds in APAC, which is driven by both market and regulatory factors. Hong Kong and Singapore remain the two most competitive jurisdictions in terms of attracting funds and fund managers; however, each has its own particular strengths and disadvantages. InsightLegal Asia Consulting specialises in ‘clarifying complexity’ and below we provide some guidance on how regulatory initiatives in Asia-Pacific are affecting the development of different types of fund and hedge fund structures in APAC.

Asset Flows Update

February 2014 | Eurekahedge


Hedge funds started off the year against the backdrop of a difficult market setting as concerns over the health of the global economic recovery resurfaced; aided by disappointing PMI numbers from China and a deteriorating situation in emerging economies as the ‘QE withdrawal symptoms’ began to manifest themselves yet again. The Eurekahedge Hedge Fund Index was down 0.48% during the month, outperforming underlying markets as the MSCI World Index declined 3.74% in January.

Hedge Fund Performance Commentary

February 2014 | Eurekahedge


Hedge funds were down 0.48% in January, outperforming underlying markets as the MSCI World Index declined 3.74% during the month with global markets off to a bumpy start in 2014. Global markets trended downwards during the month led by weak US jobs data and discouraging PMI numbers from China. Market sentiment weakened further towards the month-end as the Fed announced another round of QE trimming which catalysed investor flight from emerging economies and led credence to concerns regarding the health of the global economic recovery. Emerging market currencies also came under sharp selling pressure with markets watching carefully as the global economy transitions to a post-QE world.

2013 Overview: Key Trends in Asian Hedge Funds

February 2014 | Eurekahedge


The Asian hedge fund industry delivered excellent performance in 2013, beating underlying markets and outperforming its global peers during the year. The Eurekahedge Asia Hedge Fund Index gained 16.10% in 2013 with the total assets under management (AUM) increasing by US$20.6 billion. This brings the total size of the Asian hedge fund industry to US$147.0 billion managed by a population of 1,333 hedge funds.

Asset Flows Update

January 2014 | Eurekahedge


Hedge funds witnessed their fourth consecutive month of positive returns as global markets ended the year on a strong note of optimism. The Eurekahedge Hedge Fund Index was up 0.98% during the month, bringing its 2013 returns to 8.02%. Global markets welcomed outgoing Fed chairman Ben Bernanke’s commitment to a low interest rate regime in the post-QE tapering environment with the MSCI World Index gaining 1.67% in December.

Hedge Fund Performance Commentary

January 2014 | Eurekahedge


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.

2013 Overview: Key Trends in Global Hedge Funds

January 2014 | Eurekahedge


Global hedge funds have had a good run in 2013, with the industry attracting net asset flows of US$127.4 billion in the first 11 months of the year. This robust allocation activity, combined with excellent performance-based gains of US$85.6 billion delivered by hedge fund managers puts the current assets under management (AUM) of the industry at US$1.99 trillion.

Hedge Fund and Private Equity Fund Secured Loans and the Volcker Rule

January 2014 | Bryan G. Petkanics and Paul W.A. Severin, Loeb & Loeb LLP


Loans secured by interests in hedge funds and, to a lesser extent, private equity funds have been a staple of many banks’ credit offerings for years. However, the Dodd-Frank Wall Street Reform and Consumer Protection Act (Pub. L. 111-203, H.R. 4173) (Dodd-Frank) in general, and the part thereof known as ‘the Volcker Rule’ in particular, have raised a basic question: “Can a banking institution subject to the Volcker Rule (which is virtually every banking institution in the U.S.) continue to make and enforce hedge fund and private equity fund secured loans?”

Top Ten Things Every Asian Hedge Fund Manager Should Know About AIFMD

January 2014 | Sarah Bowles, Darren Fox, Rolfe Hayden and Gaven Cheong, Simmons & Simmons


The European Union Directive on Alternative Investment Fund Managers (Directive 2011/61/EU) (AIFMD) was required to be implemented into the national laws of the 28 Member States of the European Union (EU) by 22 July 2013 and also into the national laws of the three additional European Economic Area (EEA) states (Norway, Iceland and Liechtenstein) by a date to be determined. On 19 December 2012, the European Commission (the Commission) published a delegated regulation supplementing AIFMD (the Level 2 Regulation), which sets out further detail around certain other provisions in AIFMD and is directly applicable in the Member States without the need for implementation.

Asset Flows Update

December 2013 | Eurekahedge


Hedge fund returns were up for the third consecutive month as markets remained upbeat following encouraging job creation data from the US, with Janet Yellen’s dovish sentiments regarding the short-term continuation of the Fed’s QE program giving a further leg up to investor sentiment. The Eurekahedge Hedge Fund Index was up 1.31% during the month, bringing its year-to-date (YTD) return to 7.34%. The MSCI World Index gained 1.27% during the month.

Hedge Fund Performance Commentary

December 2013 | Eurekahedge


Hedge funds delivered their third consecutive month of positive returns as global markets maintained their upward momentum. The Eurekahedge Hedge Fund Index was up 1.31% during the month, edging past the MSCI World Index which gained 1.27% in November.

2013 Overview: Key Trends in Latin American Hedge Funds

December 2013 | Eurekahedge


The Latin American hedge fund industry has continued to provide remarkable performance and growth for hedge fund investors over the years with the Eurekahedge Latin America Hedge Fund Index up 15.0% on an annualised basis since December 1999 and the total assets under management (AUM) of the industry currently standing at US$61.3 billion.

Asset Flows Update

November 2013 | Eurekahedge


Hedge fund returns were up for the second consecutive month in October amid trend reversals in the underlying markets. The Eurekahedge Hedge Fund Index was up 1.41% during the month, bringing its year-to-date return to 5.84%. The MSCI World Index gained 3.75% during the month.

Hedge Fund Performance Commentary

November 2013 | Eurekahedge


Hedge funds delivered healthy gains in October as global markets trended upwards during the month. The Eurekahedge Hedge Fund Index was up 1.41% during the month, while global stock indices outperformed as the MSCI World Index gained 3.75% in October.

2013 Overview: Key Trends in Funds of Hedge Funds

November 2013 | Eurekahedge


Funds of hedge funds have had a positive year so far in 2013 with the Eurekahedge Fund of Funds Index gaining 4.18% at September year-to-date, and outperforming the benchmark Eurekahedge Hedge Fund Index in five out of the first nine months of the year. While a rebound in market sentiment has helped multi-managers post performance-based gains, their return to historical highs continues to be undermined by the trend of negative asset flows in the industry which were recorded at US$67.3 billion as at end-September 2013.

A New Era of Openness, or Open Season on Hedge Funds?

November 2013 | Nicholas Lewis, McGuireWoods LLP


In a recent speech before the Managed Funds Association, U.S. Securities & Exchange Commission (SEC) Chair Mary Jo White discussed what she called a “new era of transparency and openness” for the private funds industry, including hedge funds. Her address largely provided an overview of two significant pieces of legislation, namely, the Dodd-Frank Act, which among other things requires most hedge fund advisers to register with the SEC, and the JOBS Act, which lifted the longstanding ban on solicitation in connection with certain private securities offerings.

Hedge Fund Managers: Your 2013 Annual Compliance Check-Up – Quick Tips on Doing a Self-Diagnosis

November 2013 | Ronald M. Kosonic and Sarah K. Gardiner, Borden Ladner Gervais


Canada, in keeping with the rest of the world, has seen unprecedented change in the regulation of the financial markets over the past five years – not only in scope and detail, but also in speed of implementation. At the same time, regulators have stepped up their oversight with both broad-based and targeted compliance audits, resulting in the need for financial services participants to place an increasing focus on compliance.

Asset Flows Update

October 2013 | Eurekahedge


Hedge funds were back in the black in September amid rallies in the underlying markets. The Eurekahedge Hedge Fund Index was up 1.18% during the month as global markets trended upwards, war in the Middle East was averted and the US Federal Reserve did not announce the speculated tapering of its asset purchase program. The MSCI World Index gained 3.87% during the month.

Hedge Fund Performance Commentary

October 2013 | Eurekahedge


Hedge funds realised gains in September as global markets trended upwards during the month. The Eurekahedge Hedge Fund Index was up 1.18% while global stock indices outperformed as the MSCI World Index gained 3.87% in September.

2013 Key Trends in European Hedge Funds

October 2013 | Eurekahedge


The European hedge fund industry continued its recovery amid a difficult market environment with its current assets under management (AUM) standing at US$407.8 billion overseen by a population of 3,900 hedge funds. At its peak in October 2007, the European hedge fund industry’s share of global AUM was almost 25% and currently it still remains below that level at 21.4%.

Asset Flows Update

September 2013 | Eurekahedge


Hedge funds posted slightly negative returns in August, amid increasing risk aversion in the markets. The Eurekahedge Hedge Fund Index was down 0.23% during the month as global markets reverted to ‘risk-off’ mode amid fears of another war in the Middle East and speculation that the US Federal Reserve will slow down its asset purchase program. The MSCI World Index was down by 2.26 % during the month.

Hedge Fund Performance Commentary

September 2013 | Eurekahedge


Hedge funds witnessed slightly negative returns in August amid increased risk aversion in global markets during the month. The Eurekahedge Hedge Fund Index was down 0.23% outperforming global stock indices as the MSCI World Index declined by 2.26% in August.

2013 Key Trends in Asian Hedge Funds

September 2013 | Eurekahedge


Against the backdrop of an increasingly uncertain regional macroeconomic situation, the Asian hedge fund industry has shown remarkable resilience in 2013. The Eurekahedge Asia Hedge Fund Index is up 7.77% July year-to-date, with the total assets under management (AUM) of the industry currently standing at US$139.0 billion managed by a population of 1,303 hedge funds.

Asset Flows Update

August 2013 | Eurekahedge


Hedge funds were back in the black in July as global markets swung upwards on the back of reassuring announcements from the US and European central banks. The Eurekahedge Hedge Fund Index gained 1.02% during the month bringing its year-to-date return to 3.54%. The MSCI World Index was up by 4.41% during the month.

Hedge Fund Performance Commentary

August 2013 | Eurekahedge


Hedge funds returned to their winning ways in July as global markets bounced back from a retreat in June amid positive announcements by central banks. The Eurekahedge Hedge Fund Index was up 1.02% during the month and the MSCI World Index was up by 4.83% in July.

2013 Key Trends in North American Hedge Funds

August 2013 | Eurekahedge


The North American hedge funds industry has witnessed robust growth in 2013 with the total assets under management (AUM) breaching the US$1.3 trillion mark for the first time in May, raising the region’s share of global AUM to almost 70%. With strong launch activity since 2009, the total fund population has also reached the highest level on record with the total number of funds standing at 4891.

Is it Time to Revisit Your Hedge Fund Structure?

August 2013 | Sean Dailey, Chadbourne & Parke LLP


A typical “master-feeder” private investment funds structure uses a combination of corporate entities, including companies, limited partnerships and/or limited liability companies. Investment managers should consider the consequences associated with choosing one form instead of another early in the structuring process.

Asset Flows Update

July 2013 | Eurekahedge


Hedge funds witnessed negative returns in June, bringing an end to their seven month winning streak since November 2012. The Eurekahedge Hedge Fund Index was down 1.45% during the month as global markets reverted to ‘risk-off’ mode amid speculation that the US Federal Reserve will slow down its asset purchase program. The MSCI World Index was down by 3.10 % during the month.

Hedge Fund Performance Commentary

July 2013 | Eurekahedge


Hedge funds recorded negative returns in June ending their seven month winning run, as global markets witnessed broad based declines during the month. The Eurekahedge Hedge Fund Index was down 1.45% in June, outperforming most major underlying markets as the MSCI AC World Index declined 3.10%.

2013 Key Trends in Global Hedge Funds

July 2013 | Eurekahedge


After witnessing excellent performance-based gains in 2012, hedge funds continued the momentum in 2013 while also witnessing allocations from investors. The industry has attracted net asset inflows of US$56.9 billion during the first five months of 2013 in stark comparison to last year which saw net outflows of US$3.8 billion over the course of 12 months. The robust allocation activity along with continued positive performance has brought the AUM of the industry to US$1.88 trillion as at end-May 2013.

Hedge Funds Feel the Regulatory Pressure

July 2013 | Catherine Fitzsimons, Walkers Ireland


The hedge fund landscape changed dramatically in 2008 with assets under management in severe decline, the imposition of redemption gates, NAV suspensions and general restrictions on investor withdrawals being imposed on a scale that was previously unseen. As Lord Turner, Chairman of the UK Financial Services Regulatory Authority, noted, although specific national banking crises in the past have been more severe, none have had the global impact of the 2008 financial crisis.

Eurekahedge Asian Hedge Fund Awards 2013

June 2013 | Eurekahedge


Eurekahedge Asian Hedge Fund Awards 2013

Asset Flows Update

June 2013 | Eurekahedge


Hedge funds witnessed negative returns in June, bringing an end to their seven month winning streak since November 2012. The Eurekahedge Hedge Fund Index was down 1.45% during the month as global markets reverted to ‘risk-off’ mode amid speculation that the US Federal Reserve will slow down its asset purchase program. The MSCI World Index was down by 3.10% during the month.

Hedge Fund Performance Commentary

June 2013 | Eurekahedge


Hedge funds witnessed the seventh consecutive month of positive returns in May amid mixed returns in global markets. The Eurekahedge Hedge Fund Index was up 0.32% during the month, while the MSCI World Index declined by 0.45% in May.

2013 Key Trends in European Hedge Funds

June 2013 | Eurekahedge


The European hedge fund industry has witnessed significant trends over the last 13 years, starting with a period of strong growth, a broad-based decline in the industry and a recovery phase. In 2000 there were less than 500 European hedge funds with total assets under management (AUM) of US$39 billion. Over the next seven years the total number of funds increased tremendously to cross the 3,000 mark while AUM increased nearly twelvefold to reach a maximum of US$472.8 billion by October 2007.

Charity Auction 2013

June 2013 | Eurekahedge


RICE Charity Auction 2013

Asset Flows Update

May 2013 | Eurekahedge


Hedge funds witnessed another month of positive returns in April amid mixed returns in global markets. The Eurekahedge Hedge Fund Index was up 0.87% during the month, witnessing some trend reversals in the underlying markets. The MSCI World Index gained 2.02% during the month.

Hedge Fund Performance Commentary

May 2013 | Eurekahedge


Hedge funds posted positive returns in April continuing their consecutive sixth month streak. The Eurekahedge Hedge Fund Index was up 0.87% during the month as most markets trended upwards. The MSCI World Index gained 2.02% in April.

2013 Key Trends in Latin American Hedge Funds

May 2013 | Eurekahedge


Since the start of the new millennium the Latin American hedge fund industry has witnessed tremendous growth, both in terms of number of funds and assets under management (AUM). During this time the total number of funds in the industry has increased from just over 100 to nearly 500 &ndash; an increase of 500% in the fund population, while AUM has witnessed even more impressive growth. As at end-2000 total AUM in Latin American hedge funds stood at US$2.6 billion, while this figure stands at US$62.3 billion as at end-March 2013.

Asset Flows Update

April 2013 | Eurekahedge


Hedge funds posted positive returns in March amid mixed returns in global markets. The Eurekahedge Hedge Fund Index was up 0.69% during the month as some risk aversion returned to the markets due to developments in Europe. Comparatively the MSCI World Index gained 1.76% during the month.

Hedge Fund Performance Commentary

April 2013 | Eurekahedge


Hedge funds were up for the fifth consecutive month in March, a month that saw mixed returns in underlying market indices. The Eurekahedge Hedge Fund Index was up 0.69% during the month while the MSCI World Index finished with gains of 1.76%.

2013 Key Trends in Funds of Hedge Funds

April 2013 | Eurekahedge


Funds of hedge funds started 2013 on a positive note amid renewed risk appetite in global markets. The Eurekahedge Fund of Funds Index was up 2.19% in the first two months of the year as underlying single managers witnessed strong returns on the back of rallying global markets. On the flipside, the trend of net negative flows continued from previous years as multi-managers saw net outflows of more than US$25 billion.

2013 Key Trends in UCITS Hedge Funds

April 2013 | Eurekahedge


The UCITS hedge funds industry has witnessed tremendous growth over the last four years, both in the number of funds and in assets under management (AUM). As at the start of 2013 the total number of funds in the industry is estimated at 949 with AUM standing at US$215 billion.

Asset Flows Update

March 2013 | Eurekahedge


Hedge funds posted marginally positive returns in February amid mixed returns in global markets. The Eurekahedge Hedge Fund Index was up 0.22% during the month as some risk aversion returned to the markets due to political and economic developments in Europe. The MSCI World Index was down by 0.07% during the month.

Hedge Fund Performance Commentary

March 2013 | Eurekahedge


After a strong showing in January on the back of resurgent risk appetite and rallying markets, hedge funds delivered a more muted performance in February as risk aversion increased during the month. The Eurekahedge Hedge Fund Index was up 0.22% during the month, outperforming the underlying markets which finished in negative territory. The MSCI World Index was down 0.07% in February.

2012 Key Trends in Global Hedge Funds

March 2013 | Eurekahedge


Hedge funds started off 2013 in a strong fashion with the industry delivering excellent returns and also attracting capital from investors. Currently the size of the industry stands at US$1.8 trillion and is set to hit its historical high in coming months.

Focus on BVI's Fund Regulation For Fund Managers

March 2013 | Philip Graham, Harneys


As a new ‘regulation light’ fund manager regime is launched in the British Virgin Islands, eligible fund managers can now count on a simpler application process. Philip Graham of Harneys provides an update.

Asset Flows Update

February 2013 | Eurekahedge


Hedge funds started off 2013 in a positive fashion, posting excellent returns on the back of rallying markets globally. The Eurekahedge Hedge Fund Index was up 2.32% during the month, the strongest January return since 2006. Most underlying markets witnessed rallies as the MSCI World Index gained 4.66%.

Hedge Fund Performance Commentary

February 2013 | Eurekahedge


Hedge funds posted excellent returns in January on the back of resurgent risk appetite and rallying equity markets globally. The Eurekahedge Hedge Fund Index was up 2.24% during the month, the strongest January return since 2006 while the MSCI World Index gained 4.66% in January. The capital weighted Mizuho-Eurekahedge Index was up 1.59%.

2012 Key Trends in Asian Hedge Funds

February 2013 | Eurekahedge


The Asian hedge fund industry started 2013 on much firmer ground than compared to previous years. The Eurekahedge Hedge Fund Index gained 9.79% in 2012 and total assets under management (AUM) in the industry were up during the year – currently standing at US$127.4 billion. The industry witnessed some tough times and fickle fortune since the financial crisis and over the last five years the sector has faced numerous challenges.

Asset Flows Update

January 2013 | Eurekahedge


Hedge funds finished 2012 on a high note as global markets rallied at the year-end and many managers were able to capture the upside on offer. The Eurekahedge Hedge Fund Index was up 1.46% during the month, ending the year at a healthy 6.19%. Comparatively the MSCI World Index gained 2.22% during the month.

Hedge Fund Performance Commentary

January 2013 | Eurekahedge


Hedge funds ended 2012 on a positive note and posted substantial gains across all regional and strategic mandates in December. The Eurekahedge Hedge Fund Index was up 1.46% during the month, bringing the 2012 yearly return to 6.19%. Comparatively the MSCI World Index gained 2.22%during the month and 13.55% in 2012. The capital-weighted Mizuho-Eurekahedge Top100 Index, which tracks the assets and performance of the largest 100 hedge funds, gained 6.20% in 2012.

2012 Key Trends in North American Hedge Funds

January 2013 | Eurekahedge


Over the last few years North American hedge funds have delivered a remarkable recovery from the global financial crisis, both in terms of assets under management (AUM) and performance. The industry has stood apart from hedge funds in other regions by attracting the greatest amount of assets since 2008 and also delivering four years of positive returns

Asset Flows Update

December 2012 | Eurekahedge


Hedge funds witnessed a month of healthy returns and positive asset flows in November as the prevailing sentiment turned towards the risk-on mode. The Eurekahedge Hedge Fund Index was up 0.42% as most underlying markets witnessed trend reversals in the middle of the month. Comparatively, the MSCI World Index was up by 1.05% during the month. Total assets under management (AUM) increased by US$7.7 billion during the month, bringing the size of the industry to US$1.77 trillion. Hedge funds posted performance-based gains of US$1.8 billion as most strategies were in the black in November. Net positive asset flows were also witnessed as investors allocated net US$5.9 billion to the industry.

Hedge Fund Performance Commentary

December 2012 | Eurekahedge


Hedge funds finished November in the black with marginal gains amid an environment of heightened volatility during the first half of the month, and trend reversals across many sectors in the last two weeks. The Eurekahedge Hedge Fund Index was up 0.42% in November bringing its year-to-date (YTD) figure to 4.39%.

2012 Key Trends in Latin American Hedge Funds

December 2012 | Eurekahedge


The Latin American hedge fund industry has continued to provide remarkable performance and growth for hedge fund investors over the years and the Eurekahedge Latin American Hedge Fund Index has delivered impressive annualised returns of 15.62% since December 1999. Since the financial crisis of 2008, the industry has also posted a remarkable recovery in terms of assets and the total number of funds in the region.

Asset Flows Update

November 2012 | Eurekahedge


Hedge funds ended their winning run in October with flat-to-slightly-negative returns for the month. The Eurekahedge Hedge Fund Index was down 0.19%1 during the month bringing its October year-to-date (YTD) return to 4.11%. The month witnessed a difficult trading environment for hedge funds as underlying markets witnessed trend reversals across a variety of sectors. The MSCI World Index2 dropped by 0.76% in October.

Hedge Fund Performance Commentary

November 2012 | Eurekahedge


Hedge funds delivered flat to marginally negative returns during October, ending their three month winning streak. October witnessed the Eurekahedge Hedge Fund Index down by 0.19%1 with the year-to-date (YTD) return for the index standing at 4.11% and the MSCI World Index2dropping by 0.76%.

2012 Key Trends in Funds of Hedge Funds

November 2012 | Eurekahedge


The last ten years have witnessed significant trends in growth and performance within the funds of hedge funds industry. At the start of 2002 the industry consisted of approximately 1,000 funds with assets of less than US$100 billion. Over the next seven years the industry expanded at an incremental pace to reach its maximum size of US$826 billion by March 2008.

Hedge Funds in China

November 2012 | Ying White and Yin Ge, Clifford Chance


There is no comprehensive legal or universally accepted definition of ‘hedge funds’ in China. Generally, they share certain common characteristics, including: being privately offered; requiring investors to have a certain minimum net worth and/or level of financial sophistication; investing in equity securities, fixed income securities, derivatives, futures and other financial instruments; having a perpetual term; imposing liquidity restrictions on investors’ capital; pursuing absolute return rather than measuring investment performance in relation to a benchmark; compensating managers with incentive fees; allowing considerable flexibility in investment strategies; being highly leveraged; and being subject to limited regulatory supervision.

Asset Flows Update

October 2012 | Eurekahedge


Hedge funds witnessed a month of healthy returns and positive asset flows in September as the prevailing sentiment remained in the risk-on mode. The Eurekahedge Hedge Fund Index was up 0.96%1 during the month while most underlying markets witnessed rallies on the back of monetary easing announcements by the ECB and the US Federal Reserve. The MSCI World Index was up by 2.29%2 during the month.

Hedge Fund Performance Commentary

October 2012 | Eurekahedge


September was another winning month for hedge funds as the sector posted its third consecutive month of positive returns. The Eurekahedge Hedge Fund Index was up 0.96%1 in September and 2.59% for 3Q 2012 while September year-to-date the index is up 4.20%. Global markets rallied strongly during the month on the back of monetary easing steps taken by governments – the MSCI World Index was up by 2.29%2 during the month.

2012 Key Trends in European Hedge Funds

October 2012 | Eurekahedge


European hedge funds have witnessed a challenging investment environment over the last two years amid heightened volatility, recessionary pressures and concerns over the European sovereign debt situation. While facing increased regulations from governments, the industry also saw net redemptions by investors in 2011 and 2012. The region’s hedge funds have adapted to the changed landscape through implementing various changes and as of end-September 2012 the Eurekahedge European Hedge Fund Index remains in positive territory for the year with gains of 4.48%.

Hedge Funds Must Embrace the New Communications Landscape Post-JOBS Act

October 2012 | Nick Lawler, Intermarket Communications


In anticipation of the SEC’s final rulemaking on the JOBS Act, the hedge fund industry is preparing for what are expected to be landmark changes. With the elimination of the prohibition against general solicitation and advertising, hedge funds will now have the ability to openly communicate with investors and the broader public. But to what extent will these changes affect the way hedge funds currently do business? And who will these changes benefit? The industry seems to have taken a wait-and-see approach since the President signed the Act into law in April.

Asset Flows Update

September 2012 | Eurekahedge


Hedge funds were up for the second month running in August, amid positive movements in underlying markets. The Eurekahedge Hedge Fund Index was up 0.63%1 during the month, bringing its year-to-date (YTD) return to a healthy 3.16%. Comparatively the MSCI World Index gained 1.64%2 on the back of increasing prospects of quantitative easing and positive US economic data – with its YTD gain standing at 7.79%.

Hedge Fund Performance Commentary

September 2012 | Eurekahedge


Hedge funds posted another month of positive returns for August as the Eurekahedge Hedge Fund Index gained 0.63% during the month. Market sentiment was optimistic for most of the month with prospects for QE3 increasing, positive signals from the Euro zone and stronger US economic data. The MSCI World Index was up by 1.64%2in August.

2012 Key Trends in Asian Hedge Funds

September 2012 | Eurekahedge


Asian hedge funds have witnessed tough times since 2008 and have faced numerous challenges over the last two to three years. The industry saw tremendous growth between 2000 and 2007, with the number of funds increasing eight-fold and total assets under management (AUM) growing by nearly 800%. By end-2007 the size of the Asian hedge fund industry stood at US$176 billion managed by 1200 managers.

Hedge Funds and Data Protection

September 2012 | Anthony Murray, Murray LLP


Hedge funds are increasingly subject to international and local data protection regulations. The amount of personal data held by hedge funds and service providers continues to grow. As obligations to collect data increases with new regulations such as the U.S. Foreign Account Tax Compliance Act (FATCA), hedge fund managers and other service providers must pay attention to data protection laws and regulations.

Strategic Hedge Fund Planning

September 2012 | Hannah M. Terhune, Capital Management Services Group


Creating a hedge fund to protect and manage your assets or the assets of others for a fee is a practical way to earn a living. Successful hedge funds continue to attract the wealthy, the working not-so-wealthy, businesses, and pension funds looking for better investment options. Despite recent law changes, the United States still offers a favourable environment for smaller hedge fund startups. The purpose of this article is to highlight key U.S. hedge fund development and planning issues of interest to hedge fund sponsors worldwide.

Asset Flows Update

August 2012 | Eurekahedge


Hedge funds ended their longest losing streak since 2008 with positive returns of 1.10%1 in July as managers captured gains from trends across various asset classes. July saw the first month of positive returns since February and the Eurekahedge Hedge Fund Index remained in positive territory for the year – up 2.57% July year-to-date (YTD). In comparison the MSCI World Index was up 1.05%2in July and 5.47% for the year.

Hedge Fund Performance Commentary

August 2012 | Eurekahedge


Hedge funds rebounded strongly in July after four months of negative returns – the Eurekahedge Hedge Fund Index rose 1.10%1 bringing its year-to-date (YTD) gain to a healthy 2.57%. The year’s performance has weathered European sovereign debt woes, tensions in the Middle East and the dominant risk aversion from a slowdown in the global economy. After the rally in July, managers may find themselves with a fresh perspective of global markets as they continue to work towards exceeding their high water marks and hit their return targets for the rest of the year.

2012 Key Trends in North American Hedge Funds

August 2012 | Eurekahedge


Amid the uncertainty plaguing global markets and the broader financial industry, North American hedge funds have stood out as one of the few sectors that have witnessed growth and the industry maintains a healthy outlook for the future. Even among the global hedge fund industry North American managers have emerged stronger from the financial crisis of 2008 to 2009 with the number of funds at an all-time high and assets under management (AUM) touching historically high levels.

Historic Opportunities for Foreign Hedge Fund Managers in Mainland China

August 2012 | Effie Vasilopoulos, Joseph Chan and Scott Peterman, Sidley Austin


The Shanghai Municipal Government Financial Services Office (FSO) is preparing to launch the Qualified Domestic Limited Partner Program (QDLP), a pilot program that will permit qualifying foreign hedge funds to raise RMB-denominated funds in mainland China. Under current law, domestic investors are not permitted to invest in foreign hedge funds without certain government approvals that are difficult to secure. The new QDLP measures are significant in that they will, for the first time, open the China market to fundraising by foreign hedge fund managers. Following implementation, QDLP is expected to have a major impact on international fund managers that are interested in China’s sizeable institutional market.

Asset Flows Update

July 2012 | Eurekahedge


Hedge fund returns for June were in the red for the fourth consecutive month making it the longest running losing streak for the industry since 2008. The Eurekahedge Hedge Fund Index was down by 0.14%1 during the month while comparatively the MSCI World Index was up 3.65%2 amid reversal in market trends and a month-end rally.

Hedge Fund Performance Commentary

July 2012 | Eurekahedge


Hedge fund performance was flat to slightly negative in June as global markets witnessed several trend reversals during the month. The Eurekahedge Hedge Fund Index registered a marginal loss of 0.14%1 during the month, bringing its June year-to-date figure to 1.38%. In comparison the MSCI World Index was up 3.65%2 .

2012 Key Trends in Global Hedge Funds

July 2012 | Eurekahedge


The global hedge fund industry has witnessed two distinct phases during the first half of 2012: two months of strong performance and positive asset flows, followed by four months of negative performances and net outflows. Currently the size of the industry stands at US$1.75 trillion, managed by over 10,000 funds.

Hedge Fund Insights June 2012: Asian Hedge Fund Report

July 2012 | Melvyn Teo, BNP Paribas Hedge Fund Centre


We survey the Asian hedge fund landscape and shed light on the size, investment region, strategy, and performance metrics of funds operating in Asia.

Asset Flows Update

June 2012 | Eurekahedge


Hedge funds were down in May amid heightened risk aversion and falling global markets. The Eurekahedge Hedge Fund Index lost 1.55% during the month while comparatively the MSCI World Index shed1 9.32% amid broad market declines in all regions.

Hedge Fund Performance Commentary

June 2012 | Eurekahedge


Hedge funds witnessed their third consecutive month of negative returns in May as global markets registered large declines during the month. The Eurekahedge Hedge Fund Index dropped 1.55% in May but remained in positive territory for the year, up 1.91% May YTD. Comparatively the MSCI World Index shed 9.32% in the same month.

2012 Key Trends in European Hedge Funds

June 2012 | Eurekahedge


Among all the regions in the global hedge fund industry, Europe has witnessed the most dramatic changes over the last five years. At the start of the new millennium the total assets under management (AUM) in the industry were only US$39 billion. Over the next seven years this figure increased nearly twelvefold to reach a maximum of US$472.8 billion by October 2007, while the number of funds also crossed the 3,000 mark by this time.

The Billion Dollar Interview: Adam Levinson, Fortress Investment Group

June 2012 | Eurekahedge


Fortress Investment Group manages US$47 billion in variety of strategies, primarily focused on alternatives. Two hedge fund strategies – Fortress Asia Macro Fund and Fortress Convex Asia Funds are run out of Singapore.

Aircraft Finance — A New Opportunity for Private Equity and Hedge Funds?

June 2012 | Michael C. Mulitz, Daniel J. Hartnett, Willys H. Schneider and Dr. Thomas A. Jesch, LL.M., Kaye Scholer


According to the Federal Aviation Administration’s ? ‘FAA Aerospace Forecast (Fiscal Years 2011–2031),’ the commercial air carrier industry will grow by a remarkable 3.7% over the next five years. System capacity in available seat miles – the overall yardstick for how busy aviation is on a global scale – will increase 4.5% in 2011 and is expected by the FAA to grow thereafter at an average annual rate of 3.6% through 2031.

Eurekahedge Asian Hedge Fund Awards 2012

May 2012 | Eurekahedge


The Eurekahedge Asian Hedge Fund Awards 2012 took place on 25th May 2012, marking another year of success as Eurekahedge celebrated the best of the Asian hedge fund industry. With 320 hedge fund players in attendance, Eurekahedge gave credit to the top achievers of 2011 and 1Q 2012 and were pleased to welcome many new faces among this year’s event.

RICE Charity Auction 2012

May 2012 | Eurekahedge


RICE Charity Auction 2012

About RICE

May 2012 | Eurekahedge


Eurekahedge and the RICE fund are collaborating once more in 2012 to promote efforts in supporting the wellbeing of children throughout Asia via educational programs, shelter initiatives and healthcare provision. The RICE fund was started in 2006 by a small group of enthusiastic people from the Asian hedge fund world. Our vision was to share the success of our industry, supporting children - and children’s educational projects - within the region. Since September 2010, RICE has been registered as an International Charitable Organization (ICO) in Singapore. RICE became officially registered as a Hong Kong charity in 2011.

Asset Flows Update

May 2012 | Eurekahedge


Hedge fund returns were flat to slightly negative in April as most regions and strategies witnessed marginal movements during the month. As managers provided downturn protection amid declining markets globally, the Eurekahedge Hedge Fund Index was down 0.17%1and the MSCI World Index declined 1.62%.

Hedge Fund Performance Commentary

May 2012 | Eurekahedge


The Eurekahedge Hedge Fund Index was down 0.17%1 in April; a month that saw risk-aversion return to global markets. Most regional mandates provided downside protection to their investors and outperformed the underlying market indices with the average hedge fund manager finishing the month ahead by 1.45%. The MSCI World Index declined 1.62%2 during the month.

2012 Key Trends in Latin American Hedge Funds

May 2012 | Eurekahedge


Amid an environment of increasing uncertainty in the markets, the Latin American hedge fund space has provided investors with continued growth and consistent performance. Since its inception in December 1999 the Eurekahedge Latin American Hedge Fund Index has gained 538.22%. The sector has also witnessed tremendous expansion in terms of fund population and assets under management (AUM). Over the last 12 years the number of managers increased from just over a hundred in 2000 to 480 as at end-March 2012, while AUM increased from US$2.7 billion to US$58.9 billion in the same time period.

Implications of the JOBS Act and STOCK Act on Hedge Funds

May 2012 | Scott R. MacLeod, James S. Crenshaw, Christopher P. McHugh and Amy R. Rigdon, Holland & Knight


In early April 2012, President Obama signed into law two separate acts that will have a profound effect on hedge funds. The implications of these two new laws, the JOBS Act and the STOCK Act, are discussed below. The JOBS Act: allows advertising in hedge fund offerings and increases the permitted number of investors in certain funds

Asset Flows Update

April 2012 | Eurekahedge


Hedge funds delivered a flat-to-marginally negative performance in March as the Eurekahedge Hedge Fund Index dropped 0.18%1 for the month. Global markets witnessed divergent trends as US economic data continued to be positive, although Europe and Asia saw some declines and the MSCI World Index gained 0.39%

Hedge Fund Performance Commentary

April 2012 | Eurekahedge


After witnessing the best start to a year since 2000, in terms of performance, hedge funds paused for a breather in March 2012, delivering a marginally negative performance. With the exception of the US, most markets across the globe registered declines and the Eurekahedge Hedge Fund Index dipped 0.18%1 in March with the MSCI World Index up by 0.39% in March.

2012 Key Trends in Funds of Hedge Funds

April 2012 | Eurekahedge


Funds of hedge funds started 2012 on a positive note witnessing the strongest January to February performance in six years. The Eurekahedge Funds of Hedge Funds Index was up 3% in the first two months of the year as underlying single managers delivered their best start to a year since 2000. On the flipside, the trend of net negative flows continued from 2010 and 2011 as multi-managers saw net outflows of over US$20 billion.

2012 Key Trends in UCITS Hedge Funds

April 2012 | Eurekahedge


UCITS hedge funds have witnessed significant growth since 2007 as managers have continued to attract investment interest from insurance companies, pension funds and other institutional investors. As illustrated in figure 1, assets in UCITS compliant hedge funds have expanded nearly threefold with 912 managers overseeing US$190 billion of capital as at end-February 2012.

Key Issues for Managers of Offshore Hedge Funds Launching Alternative UCITS

April 2012 | Mark Browne, Mason Hayes & Curran


Recognition of ‘UCITS’ as a global brand for funds continues to go from strength to strength. In the years following the introduction of the potential for such funds to take advantage of additional investment options more typically associated with the alternative industry and hedge funds (in particular further to the ‘UCITS III’ regulatory

Asset Flows Update

March 2012 | Eurekahedge


Hedge funds witnessed another month of strong returns in February as upbeat sentiment dominated global markets. Optimism about the European debt situation and strengthening global economy fuelled rallies in the underlying markets evident in the Eurekahedge Hedge Fund Index and MSCI World Index1 gains of 2.05% 2and 4.55% respectively during the month.

Hedge Fund Performance Commentary

March 2012 | Eurekahedge


The Eurekahedge Hedge Fund Index gained 2.05% in February as optimism about the European debt situation and strengthening global economy fuelled rallies in the underlying markets. The MSCI World Index increased 4.55%2 as investor sentiment remained positive for the second month running.

2012 Key Trends in Global Hedge Funds

March 2012 | Eurekahedge


Global hedge funds witnessed remarkable and divergent trends in 2011, delivering negative performance but also attracting net positive asset flows for the year. As at end-December 2011, the total size of the industry stood at US$1.7 trillion while the Eurekahedge Hedge Fund Index finished the year in negative territory with a decline of 4.02%

Hedge Fund Interview with Vincent Lam, Chief Investment Officer of VL Asset Management Company

March 2012 | Eurekahedge


VL Asset Management, founded in January 2009, is a Hong Kong-based investment firm licensed by the Securities and Futures Commission (SFC) of Hong Kong. In its team of eight, four are investment professionals with complementary skills across fund management, equity research, equity trading, journalism and company audit

Hedge Fund Terms — The Need to Stop Self-Fulfilling Standards and The Importance of Mindfulness

March 2012 | James Tinworth, Stephenson Harwood


Some terms in hedge fund documentation have existed, and been accepted, as ‘market standard’ for years. This article briefly considers a few of the more fundamental of these terms and explores whether new standards need to be found that strike a better balance between the investor, the manager and the fund.

The Use of Side Letters to Limited Partnership Agreements

March 2012 | Rob Blackstein and Myron Dzulynsky, Gowlings


A number of private equity funds and hedge funds are structured as limited partnerships that are governed by the terms of a limited partnership agreement (an ‘LPA’). A recurring theme in private equity fund investing is the use of ‘side letters’ between individual limited partners and the general partner of the fund. Side letters can range in scope from administrative matters to providing substantive rights to limited partners. Questions and issues inevitably arise as to the type of provisions that can be included in a side letter (which, in most cases only benefit the recipient of the side letter) as opposed to being incorporated into the limited partnership agreement itself (which generally benefit all limited partners of the fund).

Asset Flows Update

February 2012 | Eurekahedge


Hedge funds posted a remarkable rebound in January as global markets rallied on renewed risk appetite. The Eurekahedge Hedge Fund Index was up 2.10% during the month, making it the best start of the year since 2006. The MSCI World Index gained 4.96% driven by positive data from the US and Europe. The asset-weighted Mizuho-Eurekahedge Index was up 1.58% in January, while the Mizuho-Eurekahedge Emerging Markets Index gained an excellent 5.89% during the month.

Hedge Fund Performance Commentary

February 2012 | Eurekahedge


The Eurekahedge Hedge Fund Index was up 2.10%1 in January on the back of a strong resurgence in risk appetite, making it the strongest monthly return for the index since December 2010. The MSCI WorldIndex gained 4.96%2 as markets overcame lingering concerns about the European debt situation and posted strong rallies. The capital-weighted Mizuho-Eurekahedge Index was up 1.80% during the month.

2011 Key Trends in Asian Hedge Funds

February 2012 | Eurekahedge


The Asian hedge funds sector witnessed some mixed fortunes in 2011 with managers posting (on average) negative results for most of the year but also experiencing net positive asset flows. As at end-December 2011, the total size of the industry stands at US$124 billion managed by nearly 1300 funds.

Hedge Fund Manager Regulation: Singapore to Catch Up with Hong Kong

February 2012 | Rolfe Hayden and George Hankey, Simmons & Simmons


In the blizzard of increased regulation from the United States and European Union, in particular the Dodd Frank Wall Street Reform and Consumer Protection Act and the Alternative Investment Fund Managers Directive (AIFMD), Asia’s two competing international financial centres – Hong Kong and Singapore, have traditionally taken different approaches to the further regulation of hedge fund managers. In the former, since the enactment of the Securities and Futures Ordinance (SFO) in 2003, no exempt status has been available. In the latter, there has long been an exemption for hedge fund managers. In the Special Administrative Region, since the global financial crisis the licensing regime has remained unchanged while in the ‘Lion City’ the regulatory regime is undergoing fundamental reform

Asset Flows Update

January 2012 | Eurekahedge


Hedge funds were down 0.23% in December as global markets continued to be volatile in the last month of 2011. The Eurekahedge Hedge Fund Index finished the year with losses of 4.15%, the second-worst return for the index since its inception in 2000. Hedge funds outperformed the underlying markets by 5.8% during the year however; the MSCI World Index1 was down 0.4% in December and 9.9% for the year.

Hedge Fund Performance Commentary

January 2012 | Eurekahedge


Hedge funds recorded a -0.23% return in December amid volatile market conditions and trend reversals that persisted into the last month of 2011. The Eurekahedge Hedge Fund Index was down 4.15% for the year, making it the second worst yearly return on record. Hedge funds continued to outperform the MSCI World Index, which was down 0.40%1 in December and 9.9% for 2011. The outperformance was led by the larger funds as evident from positive figures posted by the Mizuho Eurekahedge Top 100 Index, which was up 1.87% in 2011.

2011 Key Trends in North American Hedge Funds

January 2012 | Eurekahedge


North American hedge funds witnessed another year of strong growth in 2011, despite a flat to slightly negative performance amid unhelpful market conditions. The Eurekahedge North American Hedge Fund Index registered a -1.13% return for the year, however the industry attracted US$55 billion in net positive asset flows from investors.

Building a Hedge Fund Industry in Korea: Issues and Concerns

January 2012 | Warren Park and Seonghak Ahn, Hana Institute of Finance


As evidenced by the draft amendment on local hedge funds and prime brokers that has recently been released for public review, Korea is on the verge of having its own homegrown hedge fund industry. Many of the overly restrictive regulations that had previously stifled the development of Korean hedge funds are set to be eliminated or eased, while other areas have been given greater clarity. Because of these positive steps, many industry participants are sanguine about the potential for the industry, but some of the optimism may be excessive. This article attempts to outline some potential pitfalls for the industry in its early stages and show how financial regulators and institutional investors must continue to play an important role in ensuring that the industry develops in a manner that is not only sustainable but that promotes financial system stability and investor protections.

Hedge Funds in Ireland

January 2012 | Mark Browne, Mason Hayes & Curran


Over the last 25 years, Ireland has earned a reputation as a leading domicile for internationally focused regulated investment funds. However in more recent years it has also grown to become the leading European jurisdiction for the establishment and servicing of alternative investment schemes and hedge funds in particular. Recent market statistics show that over 63% of European domiciled hedge funds currently use Irish legal structures while over 40% of global alternative investment funds (both Irish and non-Irish domiciled) are administered in Ireland.

Asset Flows Update

December 2011 | Eurekahedge


The Eurekahedge Hedge Fund Index was down 0.87%1 in November as hedge funds provided significant downturn protection in a month marked by large declines and trend reversals. The MSCI World Index fell by nearly 10% during the course of the month and closed 3.22% lower at the end. Hedge funds also witnessed another month of net negative asset flows, with investors withdrawing more than US$9 billion in November.

Hedge Fund Performance Commentary

December 2011 | Eurekahedge


Hedge funds ended November with marginal losses as the investment environment continued to be unpredictable. The Eurekahedge Hedge Fund Index was down 0.87%1 during the month amid larger declines in global markets, while the November year to date (YTD) figure fell to -3.78%.

2011 Key Trends in European Hedge Funds

December 2011 | Eurekahedge


After posting strong growth in 2009 and 2010, European hedge funds have faced some challenging times in 2011. The Eurekahedge European Hedge Fund Index was down 5.54% November YTD while assets under management (AuM); which had crossed the US$400 billion mark earlier this year, fell back to US$380 billion.

Multi-Manager or Direct: The Pros and Cons of Each Approach To Hedge Fund Investing in South Africa

December 2011 | Carla de Waal and Marius Kilian, Novare Investments


The most important initial decisions for an investor are whether a hedge fund allocation is suitable for their portfolio and, if so, what the size of the allocation should be. It would be prudent to obtain expert financial advice when making this decision. The next step is how to access the opportunity set of available hedge funds, and here investors can choose to invest directly in one or more single-manager hedge funds, or use the multi-manager approach and invest in a fund of hedge funds. A fund of hedge funds is a diversified portfolio of individual hedge funds.

Asset Flows Update

November 2011 | Eurekahedge


Hedge funds were up 2.04% in October as markets reversed sharply from the downtrend seen in the previous two months. Better than expected economic data from the US, as well as moves by European leaders to recapitalise European banks and address the debt crisis, resulted in a surge of optimism among investors. The MSCI World Index gained 8.65% during the month which witnessed rallying markets across the regions. However, the hangover from August and September led to further outflows from the sector.

Hedge Fund Performance Commentary

November 2011 | Eurekahedge


Hedge funds bounced back with strong positive performances in October after two months of negative returns in August and September. The Eurekahedge Hedge Fund Index rose 2.04%1 on the back of renewed optimism in the market and resurgent risk appetite. The MSCI World Index gained 8.65%2 amid moves to resolve the European debt crisis and better than expected economic data from the US. October YTD; the markets are down 7.60%3 while the Eurekahedge Hedge Fund Index is down 2.90% and the Mizuho-Eurekahedge Top 100 Index4 (asset weighted) remains in the black with a 2.61% return.

2011 Key Trends in Funds of Hedge Funds

November 2011 | Eurekahedge


The global fund of hedge funds industry has gone through turbulent times over the last four years. After growing at an incremental pace from 2003 to mid-2008, the industry was hit with excessive losses and widespread redemptions during the financial crisis. Since then, multi-managers have struggled to attract a significant amount of assets.

Asset Flows Update

October 2011 | Eurekahedge


Hedge funds were down 2.69% in September; another month of highly volatile movements and broad declines across global markets. The MSCI World Index lost nearly 10% making September the fifth consecutive month of declines for the index. In this market environment, hedge funds were able to outperform the markets substantially. Even so, downbeat investor sentiment resulted in net negative asset flows.

Hedge Fund Performance Commentary

October 2011 | Eurekahedge


Hedge funds outperformed global markets by 7.29% in September as the Eurekahedge Hedge Fund Index ended the month with a loss of 2.69%. Market movements were dominated by daily swings while the broad direction remained downwards sloping through the month, creating difficult trading conditions for managers. The MSCI World Index declined 9.98%, exhibiting the worst performance since October 2008 while the S&P GSCI Total Return Index declined by 12.17%.

2011 Key Trends in Asian Hedge Funds

October 2011 | Eurekahedge


Asian hedge funds have witnessed remarkable growth over the last decade in terms of both fund population as well as assets under management (AuM). As at August 2011 the total AuM in Asian hedge funds stood at US$135 billion; nearly six times that as of end-2000 while the number of funds increased more than six fold in that same period.

2011 Key Trends in UCITS III Hedge Funds

October 2011 | Eurekahedge


UCITS III hedge funds have continued to post significant gains through 2011, both in terms of assets under management (AuM) and the total number of funds. As at end-August 2011 we estimate there to be 740 unique managers1 with assets of nearly US$200 billion.

October Interview: Richard Williams of Caliburn Capital Partners

October 2011 | Eurekahedge


Caliburn Capital Partners is a thematic fund of hedge fund manager, founded in early 2005 with institutional backing of US$25 million and managed by a team of five seasoned investment professionals with 125 years combined experience of successfully managing hedge funds, funds of hedge funds and investment banking prop trading teams.

Asset Flows Update

September 2011 | Eurekahedge


The Eurekahedge Hedge Fund Index fell 2.13% in August amid heightened volatility in global markets and increased risk aversion. Despite the negative returns, managers delivered significant outperformance and downturn protection in a highly volatile environment. The MSCI World Index fell 7.70% as market sentiment turned bearish, marked by global markets changing directions frequently throughout the month. Hedge funds were able to deliver the 5.57% outperformance against the MSCI World Index, as the sector continued to attract assets, albeit marginally.

Hedge Fund Performance Commentary

September 2011 | Eurekahedge


Hedge funds surpassed global equity markets in August as the Eurekahedge Hedge Fund Index ended the month down 2.13% but with notable loss mitigation, outperforming the MSCI World Index2 by 5.57%. Challenging market conditions, lacklustre investor sentiment, the S&P credit downgrade of US Treasuries, as well as European debt worries were the main issues in the month as the MSCI World Index fell 7.7%. All major regional equity exchanges finished the month deep in the red with European bourses witnessing the largest losses as the MSCI Europe Index declined 10.47%. CTA and macro hedge funds capitalised on volatile markets and made net gains for the month of 0.08% and 0.19% respectively.

2011 Key Trends in Latin American Hedge Funds

September 2011 | Eurekahedge


The Latin American hedge fund space has seen remarkable growth over the past decade. As of July 2011, the number of funds was nearly four times that as of end-2000, while assets over the same period recorded an increase over 23-fold. There are currently 442 operational hedge funds, managing over US$64 billion in assets.

2011 Key Trends in Islamic Funds

September 2011 | Eurekahedge


Over the last 10 years Shariah compliant funds have seen significant growth, both in terms of the number of funds as well as assets under management (AuM). Rapid developments in the Islamic finance industry, have led to an increasing number of Shariah compliant funds employing different strategies and investing across new asset classes, representing the progress and advances made in the Islamic finance sector. In this report we discuss the key trends observed in the Islamic funds industry since 2000.

Large Start-ups Raise Money More Easily but Perform Worst

September 2011 | Siewling Lay and Peter Douglas, GFIA Pte Ltd


The size of assets under management (AUM) is one of the more common factors many investors use in their initial screening process to come up with a preliminary shortlist of investable funds. Some investors, in particular the larger ones, might be constrained by their necessarily large ticket size, resulting in them only looking at funds above a minimum AUM. Others may be concerned about the costs associated with, and sustainability of, a fund with a small asset size.

Asset Flows Update

August 2011 | Eurekahedge


Hedge funds posted another month of outperformance in July with the Eurekahedge Hedge Fund Index gaining 0.44%1 during the month. The industry also continued to attract capital for the eighth consecutive month while managers in all regions outperformed their respective underlying market indices. The MSCI World Index2 declined by 2.59% during the month due to concerns of the global economic recovery, the European debt crisis and the US debt ceiling situation.

Hedge Fund Performance Commentary

August 2011 | Eurekahedge


The Eurekahedge Hedge Fund Index gained 0.44% in July; a month marked by high risk aversion arising from uncertain macroeconomic conditions, the ongoing debt crisis in Europe and the drawn out political debate in America regarding the US debt ceiling. Hedge funds were able to provide substantial downturn protection amid these conditions while global markets were mostly down during the month as the MSCI World Index declined by 2.59%.

2011 Key Trends in Global Hedge Funds

August 2011 | Eurekahedge


Despite an environment of increasing uncertainty in the markets, the global hedge funds sector has witnessed some strong trends in the first half of 2011. Chief among these trends: the industry attracted record inflows in the first 6 months of the year. As of end-June 2011, the size of the industry currently stands at US$1.81 trillion.

View from the Cayman Trenches

August 2011 | Paul Scrivener and Jonathan Fitzgibbons, Solomon Harris


All involved with Cayman’s hedge fund industry have ‘lived in interesting times’ over the past few years. What developments have there been and how do things stand now? Paul Scrivener and Jonathan Fitzgibbons give their insight ‘from the trenches’.

Asset Flow Update

July 2011 | Eurekahedge


Global hedge funds were down for the second month running as the Eurekahedge Hedge Fund Index declined 1.22% in June and was flat to slightly positive for the first half of 2011. Comparatively, the MSCI AC World Index was down 1.88% in June and up 1.05% year to date (YTD).

July 2011 Hedge Fund Performance Commentary

July 2011 | Eurekahedge


Hedge funds were down 1.22% in June, ending the 1H 2011 with marginal returns of 0.33%. The month was marked by trend reversals in the markets and changes in investor risk appetite, which was the prevalent theme throughout 2Q 2011. However, hedge funds outperformed the underlying markets – the MSCI World Index saw declines of 1.88% for the month.

2011 Key Trends in North American Hedge Funds

July 2011 | Eurekahedge


The North American hedge fund industry has witnessed some significant trends since year 2000. At the turn of the millennium, the sector accounted for more than 84% of the global hedge fund industry with US$258 billion in assets managed by 1,815 managers. Over the next eight and a half years, the sector witnessed exponential growth with assets under management peaking in June 2008 at US$1.247 trillion – an increase of nearly 500%. The fund population also increased significantly to cross 4,600 funds over the same period.

The Billion Dollar Interview: Michael Coleman

July 2011 | Eurekahedge


Mr Coleman, together with his partner Doug King, founded Aisling Analytics in 2004, a Singapore-based commodity focused hedge fund manager. Aisling's flagship product is The Merchant Commodity Fund which launched in June 2004. A proprietary commodity trader since starting work in 1982, Mr Coleman worked for Cargill for 19 years in a variety of commodity trading and trading management positions. In 2001, Mr Coleman in conjunction with Marubeni founded U Derivatives where he was Chief Operating Officer until April 2004. Mr Coleman has been based in Singapore since 1984. A UK citizen, Mr Coleman was born in St. Helens Lancashire and is a Director of St. Helens Rugby League Football Club. He studied at Exeter College Oxford where he attained a BA in Natural Science (Geology).

UCITS IV — Rules of Conduct and the Challenges facing Management Companies and Self-Managed Investment Companies

July 2011 | Elaine Keane, Maples and Calder


Under the auspices of UCITS III, management companies (“ManCos”) and self-managed investment companies (SMICs) have been organised and maintained in accordance with the requirements of the Management Directive (Undertaking for Collective Investment in Transferable Securities Directive 2001/107) such that the board of directors are required to carry out eight key functions, being: decision taking, monitoring compliance, risk management, monitoring investment performance, financial control, monitoring capital, internal audit and supervision of delegates in the course of their management of the relevant UCITS.

Asset Flows Update

June 2011 | Eurekahedge


Hedge funds were down 1.24% in May, ending a 10 month winning run for the industry. However managers in all regions outperformed their respective underlying market indices, as the MSCI World Index declined by 2.52% during the month. Additionally, the industry continued to attract capital from investors for the sixth consecutive month, despite a spike in risk aversion.

Hedge Fund Performance Commentary

June 2011 | Eurekahedge


Hedge fund returns were negative during May as sudden trend reversals and an environment of increased volatility effected performance. The Eurekahedge Hedge Fund Index was down 1.24% during the month, against the backdrop of a 4.75% increase in the VIX and a 2.52% decline in global equities, as measured by the MSCI AC World Index2. Although this was the first negative month for hedge funds since June 2010, the average return of -1.24% can be considered as an outperformance to the underlying markets which were down by more than twice as much.

2011 Key Trends in European Hedge Funds

June 2011 | Eurekahedge


Over the last few years no other sector of the global hedge funds industry has witnessed greater change than European hedge funds. The region witnessed exponential growth in the five years between 2002 and 2007, reaching a maximum size of US$472.8 billion by October 2007 with the total number of funds crossing the 3000 mark. However the industry saw its asset base reduce drastically during the global financial crisis, losing nearly 40% of the assets between January 2008 and March 2009. In this report we analysed the main trends observed over the last five years in European hedge funds, and as a special feature we explore the growth of UCITSIII hedge funds in the post-financial crisis world.

Asian Hedge Fund Awards 2011 - Winners Announced

May 2011 | Eurekahedge


With the conclusion of the Asian Hedge Fund Awards 2011, we are pleased to announce that the event was an exceptional success with 300 hedge fund industry players in attendance. As we gave credit to the top achievers of 2010 and 1Q2011, we were also pleased to welcome many new faces among this year’s remarkable turnout.

Asset Flow Update

May 2011 | Eurekahedge


Hedge funds continued to attract capital from investors in April with strong performance adding to gains in total assets under management. The Eurekahedge Hedge Fund Index was up 1.58% through April – a month marked with strong returns among underlying hedge fund strategies. The MSCI World Index was up 1.84% during the month.

May 2011 Hedge Fund Performance Commentary

May 2011 | Eurekahedge


Hedge funds delivered another month of strong returns aided by favourable market conditions in April 2011 and rallies in underlying markets. The composite Eurekahedge Hedge Fund Index, which tracks the performance of nearly 2800 hedge funds, advanced 1.58% in April, bringing its 2011 year to date (YTD) return to 2.84%. Global equities, as represented by the MSCI World AC Index, gained 1.84% in the same month in the face of reduced risk aversion and improved earnings fundamentals.

Key Trends in Funds of Hedge Funds

May 2011 | Eurekahedge


The global fund of hedge funds industry witnessed some very strong trends over the last decade, in terms of size and population as well as different aspects of the industry’s make-up. After growing at an incremental pace in the 2003 to mid-2008 period, the size of the industry reached US$826.2 billion in March 2008. However excessive losses and widespread redemptions, triggered by the global financial crisis and some high profile frauds, reduced total assets under management substantially and by July 2009 industry assets fell to US$433.7 billion.

Asset Flows Update

April 2011 | Eurekahedge


The Eurekahedge Hedge Fund Index was up 0.15%1 in March, with managers also witnessing strong asset flows of US$13.9 billion from investors. It was, however, a turbulent month for the industry, marked with swings in risk appetite and mid-month trend reversals. Managers did well to navigate through the uncertainty and protect capital. Most market indices ended March in the red – the MSCI World Index2 was down 1.53% in the month.

2010 Overview: Key Trends in Asian Hedge Funds

April 2011 | Eurekahedge


In relation to asset growth, performance, development of the service provider space and availability of new products and strategies, the Asian hedge fund industry has witnessed some remarkable trends over the last 11 years. At the start of 2000, there were less than 150 hedge fund managers that were investing in the region, including those based outside Asia, with a total AuM of less than US$20 billion.

2010 Overview: Key Trends in UCITS III Hedge Funds

April 2011 | Eurekahedge


The interest among investors for UCITS III hedge funds surged in 2010 and has continued into the start of 2011. In this report, we monitor the developments in UCITS III hedge funds and touch upon some of the key aspects of the industry such as location of managers, strategies being employed as well as looking at some of the main performance trends.

Tapping Retail Demand for Hedge Funds

April 2011 | Michael Greaney and Olwyn Alexander, PricewaterhouseCoopers


With several publicly-offered hedge funds now exceeding US$1 billion in assets, the stage is set for more to be launched. Such is the demand for these products that many managers are overcoming long-held objections to them. Indeed, many now view them as a valuable way to diversify their investor bases.

Moving Offshore Funds Onshore - A Practical Guide

April 2011 | Mark Browne, Mason Hayes & Curran


Recent industry statistics show increased interest from alternative investment managers in basing their funds in onshore-regulated jurisdictions and as a result of this trend, Ireland recently overtook both Bermuda and the BVI as a domicile for hedge funds for the first time.

Asset Flows Update

March 2011 | Eurekahedge


The Eurekahedge Hedge Fund Index advanced 1.09% in February, witnessing strong asset flows from investors. Managers capitalised on positive movements in underlying markets as upbeat sentiment pushed most regional indices upwards. The MSCI World Index gained 2.75% in the month.

Hedge Fund Performance Commentary

March 2011 | Eurekahedge


Hedge funds were up for the eighth consecutive month in February amid healthy upward movement in most markets. The Eurekahedge Hedge Fund Index gained 1.09% during the month, bringing its year-to-date return figure to 1.27%. Market sentiment was buoyant through most of the month, leading to rallies in underlying markets – the MSCI World Index was up 2.75% in February.

2010 Overview: Key Trends in Latin American Hedge Funds

March 2011 | Eurekahedge


The Latin American hedge fund sector is one of the fast growing segments of the global hedge fund industry. Over the last decade, the total number of hedge funds in the region has increased four-fold while the assets under management has grown by nearly 25 times. Currently, the size of the Latin American hedge fund industry stands at US$60 billion.

Consulting One – Team Working in Hedge Funds

March 2011 | Simon Kerr


There is no such thing as a perfect hedge fund – we are all trying. So in my role as a consultant to hedge fund portfolio managers (PMs), I am usually carrying out remedial work in some dimension. Sometimes, it can be about the positioning of hedge funds commercially, but usually, it is about what the portfolio managers are doing.

Asset Flows Update

February 2011 | Eurekahedge


After ending 2010 with excellent results, the hedge fund industry slowed down in January and delivered a flat to slightly positive performance. The Eurekahedge Hedge Fund Index advanced 0.06% in January – a month marked with mixed returns among underlying strategies. The MSCI World Index was up 1.87% during the month.

Hedge Fund Performance Commentary

February 2011 | Eurekahedge


Hedge funds were up for the seventh consecutive month in January, posting a marginal result of 0.06% for the month. Price movements in global markets were erratic in a month marked by various themes including improving economic fundaments in the US, political instability in the Middle East and rising inflationary pressure. The MSCI World Index was up 1.87% in January.

2010 Overview: Key Trends in Global Hedge Funds

February 2011 | Eurekahedge


The global hedge fund sector continued its robust recovery from the global financial crisis throughout 2010. The industry has witnessed strong inflows since the second quarter of 2009, while hedge funds across all regions and strategies delivered positive returns for 2009 and 2010, with some indices posting record gains during this period. The Eurekahedge Hedge Fund Index was up 10.99% in 2010.

The European AIFM Directive – New Distribution Opportunities for Hedge Funds

February 2011 | Mark Browne, Mason Hayes & Curran


The European Parliament adopted the Alternative Investment Fund Managers Directive (the 'Directive') on 11 November 2010. The Directive contains new rules on the marketing of alternative investment funds in the EU by both European and non-European managers. This paper considers the impact of the provisions of the Directive, the opportunities afforded by this new European 'passport' for alternative funds and sets out the timeline for implementation of the new framework.

Conducting Proper Due Diligence on Third-Party Service Providers

February 2011 | Gabriel Kirkland


In a typical hedge fund structure, the board of directors will delegate the different functions necessary to the day-to-day activities of the fund to a selection of third-party service providers. In practice, the directors, too often, are selected at the very end of the fund's creation process and therefore usually have little to say in the final choice of the service providers. The hedge fund managers, especially the start-up ones, could gain by reversing the selection process on his head and bringing in the independent directors early on. By doing so, the manager will be able to benefit from the experience of the directors, demonstrate his commitment to strong corporate governance and bring some independence in the pre-launch phase.

What Are the Steps Required to Set Up a Forex Hedge Fund?

February 2011 | Forex Traders


Trading currencies has become a very popular investment activity over the past few years. Many have determined that the medium is either too high risk or too stressful for their tastes, but a relative few have invested the time required to learn the craft, have felt a personality match with the rigorous trading regimen, and have achieved a level of success and consistency over time. As the word has gotten out regarding their prowess, friends have come forward with funds to add to the pool. Success breeds growth, but at some juncture in the timeline, the successful trader may soon want to formalise the informal arrangements at hand.

Asset Flows Update

January 2011 | Eurekahedge


Hedge fund assets under management grew by US$34.1 billion through December as managers ended 2010 on a high note. The Eurekahedge Hedge Fund Index posted a strong return of 3.01% in the month, bringing the yearly return to 10.93%. This marks an outperformance to underlying markets in the yearly return measure as the MSCI World Index delivered a 7.83% return for the year.

Hedge Fund Performance Commentary

January 2011 | Eurekahedge


Hedge funds were up for the sixth consecutive month in December, posting a return of 3.01% for the month as global markets rallied at year's end on the back of an upbeat US market outlook. The Eurekahedge Hedge Fund Index posted double digit growth during 2010, ending the year with a gain of 10.93% and beating the underlying markets by more than 3.10%. The MSCI World Index was up 5.55% in December and 7.83% for the year.

2010 Overview: Key Trends in North American Hedge Funds

January 2011 | Eurekahedge


The Eurekahedge North American Hedge Fund Index was up 13.33% during 2010 as the region’s hedge funds maintained their winning run. North American managers had posted record returns in 2009, and although 2010 was marked by high volatility and sudden swings in the markets, the funds continued to deliver consistent returns throughout the year. This was the third consecutive year that the region’s hedge funds outperformed those in other developed markets. Managers also attracted significant capital from investors in 2010, gaining US$60.4 billion in net positive asset flows – accounting for most of the US$70.6 billion allocated within the global industry during 2010.

Hedge Fund Performance Commentary

December 2010 | Eurekahedge


Hedge funds were up for the fifth consecutive month as managers outperformed the underlying markets in November. The composite Eurekahedge Hedge Fund Index returned 0.40% in the month, bringing its year-to-date return to a healthy 7.72%. In contrast, the MSCI World Index2 fell 2.35% during a month of high volatility and sudden trend reversals, with its YTD November figure falling to 2.15%

2010 Overview: Key Trends in European Hedge Funds

December 2010 | Eurekahedge


The European hedge fund industry grew at a rapid pace in the first seven years of the last decade, with assets increasing 12-fold to reach US$464.30 billion at the end of 2007. Over the same period of time, the total number of hedge funds in the region increased six times to cross the 3,000 mark. However, as the global economy went into recession in 2008, European hedge funds went through their worst year on record, suffering heavy losses and witnessing unprecedented redemption pressure. This trend continued into the first few months of 2009, with industry assets reaching a trough of US$293.60 billion in March 2009, falling below the US$300 billion mark for the first time since 2005.

Race for Returns

December 2010 | Luke Clancy, Pensions Insight


Yale University endowment manager David Swensen launched a blistering broadside at the practices institutional investors use to select hedge funds in an interview last year with the Wall Street Journal. Swensen described fund of hedge funds as "a cancer on the institutional investor world. They facilitate the flow of ignorant capital." His argument was that such funds are self-defeating; investors need to be in the top 10% of hedge funds to succeed and, with a fund of funds, they are likely to be excluded from the best managers.

Proposed EU Short Selling Disclosure Regulations Bad for Large HF Groups and the Market

December 2010 | Simon Kerr, Simon Kerr's Hedge Fund Blog


Proposed short selling disclosure regulations announced recently by the European Commission (EC) are too stringent and threaten market efficiency in a general sense. Specifically, implementation of the regulations as currently drafted would be very damaging for larger hedge fund groups.

Understanding Cloud Computing: Benefits and Challenges for Investment Firms

December 2010 | Bob Guilbert, Eze Castle Integration


With IT budgets tighter over the past two years, many hedge fund and investment firms have had to make changes to their businesses. Staff, systems and budgets continue to be closely monitored in an effort to reduce costs and increase efficiencies.

Hedge Fund Performance Commentary

November 2010 | Eurekahedge


Hedge funds continued their winning streak through October, making it the fourth consecutive month of healthy returns. The Eurekahedge Hedge Fund Index was up 2.27% in October, bringing its year-to-date October return to a strong 7.33%, as the underlying markets continued their upward trend for the second month running. The MSCI World Index gained 2.77% in the month, up 2.69% for the year.

2010 Overview: Key Trends in Funds of Hedge Funds

November 2010 | Eurekahedge


Global fund of hedge funds have witnessed a dramatic change of fortunes over the last two and a half years. The industry grew at a steady pace between 2003 and early 2008, with assets under management peaking at US$826 billion, before suffering considerable losses and widespread redemptions1amid the global financial crises.

Hedge Fund Interview with Wong Kok Hoi, Founder, Chairman and CIO of APS Asset Management Pte Ltd

November 2010 | Eurekahedge


Founded in 1995, APS provides fund management services specialising in Asia Pacific equity investments. APS is a fully independent firm owned 100% by its employees. Mr Wong Kok Hoi, founder, Chairman and CIO of APS, has more than 29 years of investment experience. APS has three teams of 24 investment professionals based in Singapore, China and Japan, managing three key products, ie, Asia ex-Japan, Greater China and Japan equities.

Hedge Funds and Analyst Optimism

November 2010 | Sung-Gon Chung and Melvyn Teo, Singapore Management University


We find that analysts are more likely to issue favourable recommendations for stocks predominantly owned hedge funds. Moreover, these optimistic recommendations translate into poorer stock performance over the next three to six months. Hedge funds take advantage of these flattering reports by concurrently offloading their stock holdings. Our results suggest that analysts are reluctant to downgrade stocks held by their most important clients.

Hedge Fund Performance Commentary

October 2010 | Eurekahedge


Hedge fund returns were positive for the third consecutive month in September, up 3.37%, ending the quarter on a positive note. The 3Q2010 return for the Eurekahedge Hedge Fund Index was 5.21%, making it the best quarter so far in the year. The year-to-date September return now stands at a healthy 5.15%, still ahead of the MSCI World Index, which is marginally down at -0.08% YTD September.

2010 Overview: Key Trends in Latin American Hedge Funds

October 2010 | Eurekahedge


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.

2010 Overview: Key Trends in Islamic Funds

October 2010 | Eurekahedge


The rapid development of the Islamic fund industry over the last decade represents the progress and advances made in the Islamic finance sector. The primary goal of Islamic funds is to engage in 'ethical investing' into products and companies that are acceptable to the Islamic faith. As such, Islamic funds are wealth management vehicles that cater to investors who want exposure to capital markets inside a Shariah framework, which is the key distinguishing factor from other conventional funds.

The Spectrum of Investors for Latin American Hedge Funds

October 2010 | Ron Suber, John Quartararo, Patrick McCurdy and Victor Hugo Rodriguez, Merlin Securities


In the past several years, Latin American hedge fund managers have increasingly entered the competitive global race to win investment mandates. By and large, they have been successful.

Sign of the Times: Operational Due Diligence Takes Center Stage

October 2010 | Wesley Tellie and Alan Swersky, Duff & Phelps


In light of recent market turmoil and high-profile scandals, it is vital that investors verify that their hedge fund partners' businesses and operations adhere to the highest industry standards and best practices. Now, more than ever, investors are continually exploring new and more efficient approaches to determine which funds are worthy business partners.

Can Fund of Hedge Funds Managers Add Value in the UCITS Space?

October 2010 | Henrik de Koning, KdK Asset Management Limited


Over the past year, the market has been flooded by a great number of UCITS regulated funds managed by hedge fund managers. UCITS hedge funds are said to manage nearly US$ 100 billion with 980 funds globally. Another 125 funds were launched in the first five months of 2010, with total net inflows standing at US$ 12 billion.

Stock Exchanges Globally Engaging in ESG Issues

October 2010 | Elizabeth Dooley, Asia Asset Management


The Association for Sustainable & Responsible Investment in Asia (ASrIA) advocates that sustainable economic development is the only viable option for Asia, with SRI (sustainable and responsible investment) as a key market mechanism towards achieving this goal. ASrIA also points out that with growth of SRI in Europe and the US, SRI activity is growing in Asia and that despite total money under management in Asia of less than US$2.5 billion, this figure is increasing rapidly as SRI becomes incorporated into investment strategies around the region.

Hedge Fund Performance Commentary

September 2010 | Eurekahedge


Hedge funds were up for the second month running as managers outperformed the underlying markets in August. The composite Eurekahedge Hedge Fund Index advanced 0.46% during the month, bringing the year-to-date August returns to 1.71%. The MSCI World Index, on the other hand, was down 3.69%, with its YTD August number falling to -7.51%.

2010 Overview: Key Trends in Asian Hedge Funds

September 2010 | Eurekahedge


The Asian hedge fund space, which includes funds that are either based in Asia or investing in Asia, has been one of the fastest growing sectors in the global hedge fund industry since 2000, both in terms of assets and number of funds. However, the industry has also gone through difficult periods and diverse phases. After witnessing tremendous growth in the first eight years of the decade, Asian hedge funds went through a lean period in 2008 and early 2009 amid the global financial downturn and widespread redemptions.

2010 Overview: Key Trends in UCITS III Hedge Funds

September 2010 | Eurekahedge


The phenomenal growth in UCITS III hedge funds over the last few years has been one of the most interesting developments in the global alternative investment sector. Currently, the Eurekahedge UCITS III Hedge Fund Database lists 7752 UCITS III products, with another 500 to be added in the coming months. Furthermore, the Eurekahedge UCITS Hedge Fund Index, the industry benchmark and most widely used tracker in the sector, consolidates the monthly performance of 236 funds.

Are Hedge Funds Ready for SEC Registration?

September 2010 | Janaya Moscony, SEC Compliance Consultants


October 16, 2009 - We, at the SEC, are committed to pulling back the curtain on hedge fund operations and taking a close look at their activity. We are developing a variety of initiatives to do that, involving greater specialisation and expertise, improved technological tools to track and analyse trading, better coordination among regulators and law enforcement, new legislative initiatives, and other means to address these areas.

Hedge Fund Investment by Superannuation Funds

September 2010 | Craig Roodt, Australian Prudential Regulation Authority


While Australian superannuation funds were among the earliest globally to invest in hedge funds, the level of this investment has not increased at the same pace as in other jurisdictions. Given the recent developments in hedge fund practices and investment practices generally, it is opportune to examine superannuation fund investment in hedge funds, for the regulator to restate its expectations when hedge funds are part of a superannuation fund investment portfolio, and to review lessons from the global financial crisis.

Gulf Lessons

September 2010 | Jerilyn Klein Bier, FA Green


"To BP or not to BP?", a frequently asked question in recent months, was being debated in the socially responsible investment space long before the major oil company's spill in the Gulf of Mexico. Some SRI asset managers had already distanced themselves from the company given BP's fossil fuel focus, poor safety record and retreat from a previously strong commitment to sustainability.

Hedge Fund Performance Commentary

August 2010 | Eurekahedge


Hedge funds bounced back with strong positive performances in July after flat to slightly negative returns in the previous two months. The Eurekahedge Global Hedge Fund Index, which tracks the performance of more than 2,500 hedge funds on an equally weighted basis, gained 1.47% in July, bringing the year-to-date figure back in positive territory to 1.20%. The MSCI World Index also posted strong gains of 5.65% with its year-to-date July measure at -2.94%.

2010 Overview: Key Trends in Global Hedge Funds

August 2010 | Eurekahedge


In our sixth monthly review of the global hedge fund industry, we revisit some of our previous analyses, such as strategic asset flows, distribution of new fund launches and performance comparisons, and also conduct new studies into areas such as average life span, survivorship and capital inflows into the different regions.

Hedge Fund Interview with Steve Gilboy, Michael Newlander and Jason Gilboy of GLL Investors

August 2010 | Eurekahedge


Founded in 1995, GLL Investors manages five multi-manager hedge funds – all of which have posted superb returns – while maintaining unusually low-risk profiles with little or no leverage. The largest and oldest fund, GLL Investors, LP, has recorded a 10.26% average annual return over 15 years with a beta of only 0.22. Since inception, GLL is up 287.29% net through June 2010 while the S&P 500 is up 124.42%. GLL Single Strategy, which we created in 1999, invests primarily in hedge funds that specialise in PIPEs (Private Investments in Public Equities).

After the Mulligan – An Asian Hedge Fund Perspective

August 2010 | Richard Johnston, Albourne Partners


Mulligan (games): when a player gets a second chance to perform a certain move or action. To some degree, the markets of 2009 and the start of 2010 make it seem that 2008 never happened. This is especially true in Asia where we have less of the structural issues that the Western economies suffer from, ie, high consumer debt, unemployment and deteriorating government balance sheets.

Hedge Funds: A Risk Manager’s Viewpoint

August 2010 | Frances Cowell, R-Squared Risk Management


Regulators on both sides of the Atlantic are seeking to protect investors with new regulation to capture all investment products, including hedge funds and absolute return funds that have, until now, been largely unregulated. Whatever the outcome, it is up to investors to satisfy themselves that the risks taken by their managers are justified by the expected returns. The key is to ask the right questions.

Where to Start: Managed Accounts or Hedge Fund?

August 2010 | James Bibbings, Turnkey Trading Partners


I am routinely asked about the advantages and disadvantages of starting a Commodity Trading Advisor (CTA) as opposed to a Commodity Pool Operator (CPO). This is a great question and one that all money managers interested in handling forex or commodity managed accounts should consider. If answered incorrectly, this question could literally ruin the chances for success as a CFTC registrant and NFA member. If that statement was not strong enough to peak interest, how about this one: a wrong decision in this space will likely cost thousands of dollars and countless hours of valuable time.

Socially Responsible Investments Earning Their Keep

August 2010 | Damon Taylor, Super Review


Superannuation funds are continuing to back responsible investment options, not just because of their commitment to underlying principles but because they are generating competitive returns. That is the assessment of the president of the Responsible Investment Association of Australia (RIAA), Duncan Paterson, who foresees continuing growth in the sector.

Why Invest Ethically?

August 2010 | Samantha Matthew, Glacier by Sanlam


The last decade has seen increased global awareness of environmental issues. It is because of this awareness that socially responsible investing (SRI) has become more visible and structured as a type of investment. The underlying rationale behind this type of investing is not only to maximise financial returns but to promote socially and environmentally sustainable development and growth.

Hedge Fund Performance Commentary

July 2010 | Eurekahedge


Hedge fund returns were flat to marginally negative in June as most managers steered cautiously through volatile markets. The composite Eurekahedge Hedge Fund Index registered -0.59% returns for the month against the backdrop of a 3.56% drop in global equities and a sharp rise of risk aversion towards the end of the month (the Volatility Index on the Chicago Board of Options Exchange gained 37% from mid- to end-June).

2010 Key Trends in European Hedge Funds

July 2010 | Eurekahedge


While the European headlines in 2010 have been dominated by woeful tales of sovereign debt issues, the region’s hedge funds have been delivering their mandated results by providing superior downturn protection and outperforming the underlying markets. The Eurekahedge European Hedge Fund Index is up 0.25% June YTD while the MSCI Europe Index has lost 8.56% over the same time.

2010 Key Trends in SRI Funds

July 2010 | Eurekahedge


This report presents the findings of a study conducted by Eurekahedge analysts on more than 1,000 SRI funds. The aim of this research report is to find the aspects of the industry in 2010, such as where the funds are investing, which sectors and asset classes and what are the different criteria being employed.

Remote Control

July 2010 | Matthew Craig, Pensions Insight


In the last few years, hedge funds have become an integral part of the pension fund investment toolkit. Hedge funds can employ a wide range of investment strategies and the breadth of these approaches means that they can help diversify and give an 'absolute returns' flavour to investment portfolios.

Hedge Fund Performance Commentary

June 2010 | Eurekahedge


Hedge funds were down in May amid sharp movements in global markets and a spike in risk aversion. The Eurekahedge Hedge Fund Index was down by 2.33% during the month as managers struggled with the volatility and unpredictable shifts in the markets, making it the worst month for the industry since October 2008. However, the sector’s year-to-date performance remains in the black, with the Eurekahedge Hedge Fund Index up 0.78% May year-to-date. In comparison, the MSCI World Index was down 9.91% in May, standing at -7.64 for the year so far.

2010 Key Trends in North American Hedge Funds

June 2010 | Eurekahedge


After delivering excellent results in 2009, North American hedge funds continued the positive trend through the first few months of 2010. The Eurekahedge North American Hedge Fund Index advanced 4.40% in the January - April 2010 period, carrying on the momentum from last year when the sector delivered the best returns on record by gaining 23.72%.

Hedge Funds Adapt to a New Reality

June 2010 | Arthur Tully, Ernst & Young


Hedge funds have weathered the storm of the financial crisis, but they must now compete in a much tougher marketplace. Legislators are preparing tighter regulation while investors are closely vetting every position they take. In order to thrive in this climate, hedge fund managers must change how they interact with stakeholders and how they manage risk and operations. The industry has already initiated major changes that are likely to continue, but the endgame is not yet in sight.

US Hedge Fund Managers Need Patience, Understanding to Attract Japanese Investors

June 2010 | Somer Hatano, FletcherBennett


Japanese interest in US-based hedge funds is projected to increase in the years ahead as Japanese institutional investors and pension managers, in particular, seek to achieve more robust portfolio returns. Japan's aging population, pressured by a low domestic interest rate environment and the need to meet obligations, will be among the main drivers of the pensions' investment activity.

Will the New Regulations Make Hedge Fund Investing Safer?

June 2010 | Gabriel Kurland, Hedge Fund Appraisal


The month of May has been full of twists and turns in the financial markets and at the regulatory level on both sides of the Atlantic. Europeans began the “hostilities” on 18 May with the approval, by the European Parliament, of the draft text of the new Alternative Investment Fund Managers (AIFM) Directive. The Americans followed suit on 14 May 2010, with the Senate passing the Restoring American Financial Stability Act of 2010, following the Wall Street Reform and Consumer Protection Act of 2009 (HR 4173), which the US House of Representatives passed in December 2009.

Hedge Fund Performance Commentary

May 2010 | Eurekahedge


The global hedge fund industry delivered another month of outperformance in April, ending in positive territory as most global markets registered declines for the month. The composite Eurekahedge Hedge Fund Index, which tracks the performance of nearly 2,500 hedge funds across the world, advanced by 1.24%1 in April, bringing its 2010 year-to-date returns to a healthy 3.33%. Global markets, represented by the MSCI World Index, declined by 0.16% in April, with the April year-to-date figure of the index standing at 2.58%.

Hedge Funds and Mutual Funds Converge

May 2010 | Arjuna Sittampalam, EDHEC-Risk Institute


Convergence of mainstream asset management and alternative hedge funds has been much talked about for some years but has not been realised on any significant scale until recently. Several forces are accelerating the trend on both sides of the Atlantic.

Do Nice Investors Finish Last?

May 2010 | Carolyn Campbell, Emerging Capital Partners


While its roots date back to biblical times, socially responsible investing (SRI) has gained significant visibility within the stock market over the past three decades – an investment trend that began following the Vietnam War by those who did not want their money supporting companies or products that did not align with their core beliefs.

Hedge Fund Performance Commentary

April 2010 | Eurekahedge


After a leisurely start to the year, hedge funds ended the first quarter on a high note as the composite Eurekahedge Hedge Fund Index advanced 2.53% in March, bringing 2010 year-to-date returns to 2.17%. The index, which has been tracking the performance of hedge funds since December 1999, is now at its highest level on record, with the average hedge fund annualised returns standing at 11.1%, outperforming the broader stock market indices’ (represented by the MSCI World Index) yearly returns of -1.67%.

2010 Key Trends in Latin American Hedge Funds

April 2010 | Eurekahedge


The Latin American hedge fund industry has seen tremendous growth in the last decade both in terms of performance and assets under management. Since its inception in December 1999, the Eurekahedge Latin American Hedge Fund Index has gained 422.8% while the number of Latin American hedge funds has also increased four-fold over this period. The growth in assets under management picked up incrementally after 2003, registering a three-fold increase from 2004 to 2007.

Hedge Fund Interview with Jiffriy Chandra, Managing Partner and CIO for Special Situations at Income Partners

April 2010 | Eurekahedge


Jiffriy Chandra tells us more about his investment platform that covers all asset classes in the Asian markets covering high grade and sovereign credit, high yield, special situation, distressed and restructuring opportunities, equities and macro fund products. Income Partners is a Hong Kong-based asset management company dedicated to the Asian emerging markets that provides independent asset management and investment advisory services to institutional, private and high-net-worth investors, foundations, pension funds and government agencies. Headquartered in Hong Kong with offices in Beijing and Singapore, we are authorised and regulated by the Hong Kong Securities and Future Commission and registered with the Japan Financial Securities Agency (FSA).

Post-Crisis: Hedge Funds, Custodial Risk And Prime Brokers

April 2010 | Ron Suber & Aaron Vermut, Merlin Securities


Prior to the most recent financial crisis, money managers understood the concept of counter-party and custodial risk, but it was not a priority. We were coming off a 25-year bull run in the financial markets during which the industry did not experience the failure of a single significant custodial bank. In addition, the broker-dealers that failed (eg, Drexel) were handled in such a way that custodial risk remained a non-issue.

UCITS Hedge Funds: Balancing Innovation and Investor Protection

April 2010 | Olwyn Alexander, Didier Prime and Robert Mellor, PricewaterhouseCoopers


Who would have thought a year ago, in the immediate aftermath of the credit crunch, that there would now be such a large number of UCITS hedge funds, encompassing almost the full range of investment strategies. There are not only relatively simple long/short equity funds but also an increasing number of more complex macro, arbitrage and commodity vehicles.

Hedge Fund Performance Commentary

March 2010 | Eurekahedge


Hedge funds returned to positive territory in February after being marginally negative in the previous month. The composite Eurekahedge Hedge Fund Index, which tracks the performance of all hedge funds on an equally-weighted basis, was up by 0.59% on the back of mid-month trend reversals in the underlying markets.

Overview of 2009 Key Trends in Global Hedge Funds

March 2010 | Eurekahedge


Over the last decade, the global hedge fund industry has undergone exponential growth both in terms of assets under management and number of funds. Hedge fund assets hit their peak in June 2008 at US$1.95 trillion – a seven-fold increase since end-1999 – before declining due to drying-up liquidity, the collapse of some large financial institutions, tumbling equity markets and the resultant spike in risk aversion, which led to widespread redemptions.

Overview of 2009 Key Trends in UCITS III Hedge Funds

March 2010 | Eurekahedge


One of the key developments in 2009 has been the surge of interest in the UCITS III framework among alternative investment managers. Against the backdrop of the global recession and some major financial scandals, there have been increasingly vocal demands for greater transparency, risk management and regulations for hedge funds. In this situation, an increasing number of managers have started looking at the UCITS III platform as a way to not only meet the requirements of existing investors but also to market their funds to new clients who have traditionally been sceptical about, or unable to, invest in unregulated products while at the same time, utilise their unique alpha-generating strategies.

Coming to America

March 2010 | Zaki Abushal, HFMWeek


Driven by the prevailing threat of an AIFM regulatory clampdown, many European hedge funds are now looking westwards to access the rich institutional investor pickings in the US. But does the land of plenty have enough to go around? Europeans could learn a lot from their counterparts in the US on how to run a hedge fund business. It is no surprise that the vast majority of the 8,000 hedge funds worldwide operate from the US and of those, most can be found in New York.

Freedom versus Transparency?

March 2010 | Tim Sharp, Pensions Insight


For a while, hedge fund managers were the guys taking the blame for the financial crisis as banks plummeted amid short-selling. Once their bets turned out to be astute, we turned our attention to the bankers who broke their own institutions. But the spivs of Mayfair have not been forgotten in Brussels and the future of the hedge fund industry – at least in Europe – is at the mercy of European Union horse trading as politicians consider the directive on alternative investment fund managers.

Clean Oil?

March 2010 | Marla Brill, FA Green


There are two broad schools of thought about how people can invest in commodities in an environmentally friendly way. The first, practiced by many SRI fund managers, involves sorting through companies in industries such as mining and oil drilling to find those with the strongest environmental track records among their peers. The second group of investors view metal recyclers and alternative energy producers as the new commodity plays for the 21st century.

Hedge Fund Performance Commentary

February 2010 | Eurekahedge


After delivering impressive returns through most of 2009, hedge funds registered a slight decline in January 2010 against the backdrop of heightened risk aversion and mid-month reversals in market trends. The Eurekahedge Hedge Fund Index shed 0.89%1during the month while markets across the world recorded sharp declines in the second half of the month.

2009 Overview: Key Trends in Asian Hedge Funds

February 2010 | Eurekahedge


The Asian hedge fund sector grew at an exponential pace through the first eight years of the last decade before witnessing heavy redemptions in 2008 and early-2009 along with significant losses due to the financial downturn. The size of the region’s hedge fund industry peaked in December 2007, reaching US$176 billion; however, the combined effect of withdrawals and performance-based losses brought the assets under management down to US$105 billion in April 2009.

A Justifiable Optimism?

February 2010 | Dermot SL Butler, Custom House


For a while, hedge fund managers were the guys taking the blame for the financial crisis as banks plummeted amid short-selling. Once their bets turned out to be astute, we turned our attention to the bankers who broke their own institutions. But the spivs of Mayfair have not been forgotten in Brussels and the future of the hedge fund industry – at least in Europe – is at the mercy of European Union horse trading as politicians consider the directive on alternative investment fund managers.

A Fundamental Shift Onshore?

February 2010 | Peter Stapleton, Dillon Eustace


As we close out the last decade, many in the hedge fund industry will prefer to look forward rather than back to the tail end of the noughties. While some economic indicators show strong rebounds in performance by the end of 2009, the impact of the financial crisis was severe enough at the start of that year for the future of the entire industry to be called into question. Most hedge funds saw substantial falls in performance coupled with continuing investor redemptions.

Can Hedge Fund Strategies Really Be Offered via Absolute Return Funds?

February 2010 | Tim Sharp, Citywire


Supermarket chains have recently started trying to drive their customers to buy their own brand ranges by promising that they taste at least as good as famous brands. They just lack the fancy packaging. Fund management companies are trying to do the same with the launch of absolute return or UCITS III funds. Investment houses want investors to believe that they are getting more or less the same product as their hedge fund but without the mystique and risk of the Cayman Islands domicile.

Hedge Fund Performance Commentary

January 2010 | Eurekahedge


The global hedge fund sector ended 2009 with a healthy performance in December. The composite Eurekahedge Global Hedge Fund Index, which tracks the performance of all hedge funds on an equally-weighted basis, gained 1.07% in the month, bringing the 2009 figure to 19.37% – the highest yearly gains on record since the bumper year of 2003.

2009 Overview: Key Trends in Islamic Funds

January 2010 | Eurekahedge


The growth of Shariah-compliant funds over the last decade is one of the many manifestations of the dynamic development in the Islamic finance sector. The rapid expansion in the number of managers offering Shariah-compliant investment vehicles across the world demonstrates the increasing diversity of the industry in terms of asset classes and geographies. Currently, Islamic funds across the world are estimated to manage assets of about US$70 billion while the number of funds is about 680.

2009 Overview: Key Trends in North American Hedge Funds

January 2010 | Eurekahedge


The Eurekahedge North American Hedge Fund Index, which measures the performance of hedge funds allocating to North American markets, witnessed its best performance on record in 2009, posting gains of 23.45% through the year as strong rallies in the underlying markets across different asset classes worked in favour of the industry. This is a significant outperformance over the global average (19.29%) as well as the European hedge funds, which gained 21.69% during the same time period.

Hedge Fund Interview with Xiaobo Long, CEO & Managing Director of Cypress House Asset Managment Company Limited

January 2010 | Eurekahedge


Managed by Cypress House Asset Management Company, the China Dragon Engine Fund employs a long/short equity strategy, investing in Hong Kong markets and Chinese enterprises that are highly related to China's economic growth. Its CEO, Xiaobo Long reveals the fund's investment strategy in this interview.

Interview with Richard Bibb, CIO of AIMhedge Establishment

January 2010 | Eurekahedge


AIMhedge is a managed futures/CTA fund based in Liechtenstein. AIMhedge started out as the semi-automised trading system of Holger Albers in the early 2000s that was fully systematised and started live trading in 2005. AIMhedge has gone on to win Best German Hedge Fund in 2008 and nominated in the top five for ‘The Best Hedge Fund over 3 Years’ by the Hedge Fund Review Magazine.

Overcoming the Capital Challenge

January 2010 | Eurekahedge


The lower levels of leverage both of the hedge funds themselves and their investors, coupled with the willingness of Asia hedge funds to meet redemption requests, recognising that suffering a reduction in assets under management would go towards preserving the future relationship with cash-hungry investors, has meant that the level of hedge fund restructurings in Asia may have been less than in other parts of the world.

Managed Accounts: Back to the Forefront

January 2010 | Philip Niles, Butterfield Fulcrum


As Bernie Madoff gets comfortable in his new surroundings, having traded his penthouse for the jailhouse, the issue of transparency has returned to the alternative investment industry with vigour and urgency. Perhaps no more obvious is this than in the very recent and profound resurrection of managed accounts in lieu of the typical hedge fund structure.

Outsourcing Operational Hedge Fund Due Diligence

January 2010 | Markus Federle & Frederic Berthier, The Fairsky Group


The financial crisis has revealed a number of prominent examples of funds suffering from operational shortcomings and a lack of internal controls and procedures. These incidental observations are supported by recent research, which has shown that more than 50% of hedge fund failures are caused by operational issues. Fund investors are therefore refocusing their attention on operational fund due diligence and are reassessing their due diligence procedures and standards. The recently published IOSCO best market practices for funds of hedge funds provide some guidance in this respect.

Hedge Fund Performance Commentary

December 2009 | Eurekahedge


Hedge funds bounced back with strong positive performances in November after flat to slightly negative returns in October. The Eurekahedge Hedge Fund Index, which tracks the performance of all hedge funds on an equally-weighted basis, gained 1.85% in November, bringing the YTD figure to 18.24% – the highest November YTD figure on record and on par with the bumper year of 2003.

2009 Overview: Key Trends in Global Fund of Hedge Funds

December 2009 | Eurekahedge


2009 has been a year of mixed fortunes for funds of hedge funds, witnessing record redemptions through most of the year while at the same time, posting one of the best performances year-to-date. The Eurekahedge Fund of Funds Index has gained 9.17% November YTD and is on track to have the best year since 2003. In terms of asset flows, however, 2009 has been the worst year on record, witnessing net redemptions of US$164 billion November YTD.

Hedge Fund Interview with Dharmin Mehta, COO of Capveda Asset Management Limited

December 2009 | Eurekahedge


Dharmin Mehta discusses the strategies deployed by Capveda Asset Management Limited. The Capveda Emerging India Fund is owned and managed by Capveda Asset Management Limited (CAML). The asset management company and its fund are both domiciled in Mauritius. CAML specialises on the development and implementation of market neutral strategies and fund management. It has recently launched an India-centric market neutral fund for global investors. The fund derives its alpha from market volatility and inefficiencies and not market trends. The fund is based on the algorithmic trading model. “AT” refers to the strategies that give automated trading signals based on the proprietary algorithm/formula built on certain mathematical models.

The More Things Change, the More They Stay the Same

December 2009 | Paul Smith, Triple A Partners


We have just passed the one-year anniversary of the great financial crisis of 2008 – an event marked by the print and television media with a series of in-depth retrospectives. To my mind, all of these reviews seem to have struggled to portray the events of late last year as a watershed moment in the evolution of the financial services industry. Twelve months down the line, how much has really changed for the hedge fund industry in Asia and has any good come out of this crisis?

The Sophisticated Choice

December 2009 | Olivier Sciales & Remi Chevalier, Chevalier & Sciales


For a long time, Luxembourg hedge funds and funds of hedge funds (FoHFs) have been set up under several wrappers, namely funds submitted under part II of the law of 20 December 2002 on UCIs (the 2002 Law) and specialised investment funds (SIFs) governed by the law of 13 February 2007. As of today, hedge fund managers are considering launching UCITS platforms (especially ‘sophisticated UCITS’). As is widely known, UCITS funds are harmonised European retail fund vehicles that can be sold globally and which benefit from the European passport, enabling investment managers to easily market their funds within the EU.

Back Down the New Haven Line

December 2009 | Eurekahedge


It is no accident that the New Haven Line is well-populated with hedge fund managers. This landscape is a revelation of what, for the most part, hedge funds around the globe represent.

New PE Firms Hedge Bets with Pledge Funds

December 2009 | Shraddha Nair & N. Sundaresha Subramanian, Livemint


A fund without a fund is an oxymoron – but not in the increasingly crowded world of private equity (PE) and venture capitalism. Financiers are using so-called fundless structures as their calling card to enter India, where an estimated 350-400 PE funds are already jostling for space. Jaganath Swamy, a former McKinsey and Company consultant and a Wharton MBA, has used one such structure when he headed back to India after a short stint with a large PE fund in New York. He chose to launch a pledge fund after he saw that a number of limited partners (LPs) in the US were unhappy with India-focused funds.

Islamic Foreign Exchange Swap as a Hedging Mechanism Perspective

December 2009 | Asyraf Wajdi Dusuki, International Shariah Research Academy for Islamic Finance


Islamic foreign exchange swap (Islamic FX swap) is a contract that is designed as a hedging mechanism to minimise market participants’ exposure to volatile and fluctuating market currency exchange rates. To date, there are three main instruments of Islamic swaps – FX swap, cross-currency swap and profit rate swap. This article focuses solely on Islamic FX swap.

Hedge Fund Performance Commentary

November 2009 | Eurekahedge


Hedge funds largely outperformed the underlying markets in October, with the Eurekahedge Hedge Fund Index down by a marginal 0.3%1 during the month as opposed to larger decreases seen in the markets globally – the MSCI World Index lost 1.85% through October. The modest performance by hedge funds was seen in the face of a mixed month for most asset classes, as equities and commodities performed strongly earlier in the month but lost value towards the end, while the trend was the opposite for bonds and the US dollar. However, the month was significant, as it brought to an end the longest run of back-to-back positive returns since 2007.

2009 Overview: Key Trends in Latin American Hedge Funds

November 2009 | Eurekahedge


After experiencing some challenging times in 2008 and 1Q2009, Latin American hedge funds1 have rebounded remarkably in the second and third quarters of 2009, bringing the size of the industry above the December 2008 level of US$42 billion. Based on the data in Eurekahedge Latin American Hedge Fund database, we estimate the size of the hedge fund industry in Latin America to be US$51 billion, with 417 hedge funds currently investing in the region. Latin American managers posted healthy returns of 2.46% in September, bringing their YTD performance to a strong 21.1% while also attracting capital, resulting in net positive asset flows of US$4.1 billion.

Safe to Go Back in the Water?

November 2009 | James Smith


Hedge funds suffered more than just financial damage in the carnage of last year – although a near 40% decline in assets across the industry was disastrous. Scandals in the mainstream press, combined with broken performance promises, meant that the reputational impact on these funds was equally devastating.

SRI: Are We Blind to Risk in the Financial Sector?

November 2009 | Alexandra Tracy, ASrIa


The extraordinary economic events of the last year have created a unique opportunity for shareholders to re-examine their investment process and to consider both the merits and the shortcomings of environmental, social and governance (ESG) analysis, especially in respect to financial institutions.

Asset Flows Update

October 2009 | Eurekahedge


September continued the positive trend in the hedge fund sector for the year 2009 as the composite Eurekahedge Hedge Fund Index rose by an impressive 2.6%, ending 3Q2009 with a 6% gain. The performance gains are partly attributable to the continuing surge in the underlying markets globally, with the MSCI World Index gaining 3.9%, while managers also made strong profits in the fixed income and commodities sectors. September was the fifth consecutive month of net increase in assets under management which now stand at US$1.43 trillion, gaining approximately US$34 billion during the month.

Hedge Fund Performance Commentary

October 2009 | Eurekahedge


With the global markets maintaining their forward momentum through September, the hedge fund sector also continued its positive performance for the seventh straight month. The Eurekahedge Hedge Fund Index recorded a gain of 2.6% for the month and 6% for 3Q2009, bringing the YTD returns to 16.1%. This is the best year-to-September performance on record for the composite index in a decade, with 2009 performance promising to go beyond the previous high set in 2003.

2009 Overview: Key Trends in European Hedge Funds

October 2009 | Eurekahedge


After a very challenging 2008 and 1Q2009, the European hedge fund industry has witnessed a remarkable growth during the March to August 2009 period, bringing the size of the industry back to end-2008 level. European managers returned strong results of 3.34% in September, bringing the YTD performance to 19% in 2009. This is the strongest YTD September performance since 2000 (when the sector had returned 21% by the ninth month). The sector had grown at a swift pace since 2000, reaching its highest point in June 2008, with assets of US$472 billion, before shrinking rapidly in the face of heightened volatility across all asset classes and massive redemptions in the latter half of 2008 and in 1Q2009.

Lessons Learned From Hedge Fund Fraud

October 2009 | Melvyn Teo, Singapore Management University


On 10 December 2008, Bernard Madoff told two of his senior employees that his investment advisory business was “just a one big lie,” and basically a “giant Ponzi scheme”. A massive SEC investigation soon followed, which culminated with the sentencing of Bernard Madoff to life imprisonment for engineering a $65 billion Ponzi scheme, one of the largest in financial history. What intrigued market watchers was not so much the pool of well-heeled investors, including celebrities, charitable organisations, pension funds, large banks, hedge funds and funds of funds that were taken in by Madoff, but rather, how Madoff was able to escape detection for so long.

Flexibility and Tax Dominate Structure

October 2009 | Margie Lindsay, Hedge Funds Review


What are the main legal considerations in choosing a structure for a hedge fund? Brian McDermott and Siobhan Moloney at A&L Goodbody say agility, in terms of industry, investor and regulatory demand, should be considered when selecting a fund structure. They note that Irish qualified investors fund (QIF) allows the use of the most complex investment strategies. The Irish regulator’s usual requirements regarding leverage and diversification do not apply as few investment restrictions are imposed on QIFs. There are also a number of structures that can be used to mitigate difficulties in obtaining tax treaty relief.

UCITS Funds Gain Popularity, Increasingly Employ Hedge Fund Strategies

October 2009 | Grellan O'Kelly, Irish Financial Services Regulatory Authority


The term UCITS refers to the title “Undertakings for Collective Investment in Transferable Securities”. UCITS are retail funds authorised by one of the member states of the European Union (EU), and these funds have grown to become a hugely successful product, seen by investors and promoters as a “gold-standard” in terms of investor protection, regulation and disclosure. Latest figures from the Brussels-based European Fund and Asset Management Association (EFAMA) show that UCITS net assets under management as at end-March 2009 amounted to almost $6 trillion.

The Winding Road to Sustainable and Responsible Hedge Fund Investing

October 2009 | Erik Eidolf & Marcel Herbst, Harcourt AG


Sustainable and responsible investing (SRI) is rapidly making significant inroads into the mainstream investment world. Once considered a cottage industry primarily catering to a small set of faith-based investors, today approximately US$7 trillion of assets1 are managed within the context of sustainable investing. Investors, be they individual or institutional, view SRI investing no longer as an exercise in altruism, but rather as a valid means to generate superior performance. The alternative investment industry has started to offer SRI solutions as well. In our view, hedge funds are particularly suited for SRI investing. They tend to be very active investors and able to quickly adapt to changing markets. Therefore, they are also suited to embrace SRI in their investment practices. With this article, we highlight the most recent developments within the hedge fund industry related to SRI and provide our best guess as to what the future holds.

Hedge Fund Performance Commentary

September 2009 | Eurekahedge


Continuing with robust performance for August that began when markets picked up in March, hedge funds recorded their sixth consecutive month of positive returns. The Eurekahedge Hedge Funds Index gained 1.3% in August (13.3% YTD) amid mixed movement across asset classes – the S&P 500 was up by 3.3%, as markets continued with the rally which started in March, while the Dow Jones-UBS Commodity Index was down 0.6%.

2009 Overview: Key Trends in Asian Hedge Funds

September 2009 | Eurekahedge


After growing at an exponential pace for nearly five years, the Asian hedge fund industry suffered massive redemptions coupled with significant losses, owing to tumbling equity markets in 2008, bringing its size down from its peak of US$176 billion as at end-2007 to US$107 billion as at end-July 2009. Although the current level of assets is no different from that seen around the end of 2005, it represents a remarkable 24% compounded annualised growth rate since end-2000, compared to a 16% annualised growth rate for the global hedge fund industry.

How Hedge Funds are Raising Capital in 2009

September 2009 | David Shpiz, The Curran Group


Several of our clients implemented dramatic changes to their business and strategy over the last 12 months. They are beginning to think about the short and longer term needs with regard to human capital. Many of the organisations that we work with are continuing to focus on the tightened credit market and the difficulty in raising capital. We have seen the demand for effective marketers and fundraisers dramatically increase over the past six months. Many firms are looking at new avenues to increase capital and attract new investors. Fundraising is unquestionably a top priority for all of our clients.

Changing Times

September 2009 | Margie Lindsay, Hedge Funds Review


If any doubters remain, they are few and far between. The hedge fund world, even before the imposition of wide-scale regulation and oversight, has fundamentally changed. How the industry will develop, however, is not certain. Several interesting influences and trends are present. And while there is a lot of talk, it is not always clear if that has or will translate into reality.

Hedge Fund Managed Accounts: Panacea Or Source of New Risks?

September 2009 | Christopher Rose, Clear Lake Consulting


There are few investors who were not caught out by the lack of liquidity and transparency in their holdings in 2008. Managed accounts can address these issues, as well as the more publicised fraud concerns that keep investors awake at night.

Alternative Construction

September 2009 | Dr Humayon Dar, BMB Islamic


Devout Islamic investors have by and large kept themselves at bay from hedge funds. Consequently, most managers of full-fledged Islamic banks shy away from investing their proprietary money in hedge funds and get additionally nervous on the prospects of having to sell an Islamic hedge fund.

Islamic Finance and SRI: Any Crossover?

September 2009 | Novethic


Socially responsible investing (SRI) is an investment management approach which integrates environmental, social and governance (ESG) criteria in traditional financial analysis. Despite having less framework and detailed rules than Islamic finance, SRI shares a focus on non-economic factors in its economic and social principles.

Hedge Fund Performance Commentary

August 2009 | Eurekahedge


After returning a healthy 9.5% through the first half of 2009, the composite Eurekahedge Hedge Fund Index rose 2.2% in July, with returns for the first seven months of the year adding up to 12% - the best year-to-July returns on record for the Index.

2009 Overview: Key Trends in Global Hedge Funds

August 2009 | Eurekahedge


The global hedge fund industry has seen exponential growth over the past decade, with hedge fund assets peaking in mid-2008 at US$1.95 trillion – a seven-fold increase since the start of 2000. However, the drying up of liquidity, the collapse of some large financial institutions, a spike in risk aversion, tumbling equity markets and the resultant spate of redemptions saw assets shrinking by nearly a third, hitting a low of US$1.29 trillion as at end-April 2009.

Charity Updates from the Asian Hedge Funds Awards 2009

August 2009 | Eurekahedge


Here’s a brief update on the charity movements undertaken during the Eurekahedge Asian Hedge Fund Awards 2009, held in support of the World Food Programme (WFP). The amount raised through both the open and silent auctions, as well as 100% of the event’s net profits donated by Eurekahedge have now been handed over to the WFP, participating in the School Feeding Project in Cambodia.

Hedge Fund Focus: What Are The Key Issues?

August 2009 | Thiha Tun & Samantha Shankar, Herbert Smith LLP


Hedge funds have been subjected to an increased degree of scrutiny and criticism over the course of last year as a result of global financial events and ensuing demands from investors. They have responded by reviewing their practices and updating their operating models. This article summarises some of the key concerns which hedge funds have been required to focus on over the course of last year and what they face in the immediate future.

Changing Hedge Fund Landscape Shapes Demand For Technology

August 2009 | Deirdre Brennan, FINalternatives


Last year’s major shakeout in the hedge fund industry – with roughly 20% of all funds closing up shop – has radically altered its technology and risk management landscape. Those funds that did survive and the new ones just entering the market are scrambling to equip their operations with the best platforms to appease both their investors and the regulators tightening the screws on them.

Hedge Fund Performance Commentary

July 2009 | Eurekahedge


After a record quarter ended May 2009, hedge funds had a subdued month in June. The composite Eurekahedge Hedge Fund Index returned 0.2%, on the back of flat to negative returns across key asset classes; the MSCI World Index down 0.6% and the S&P 500 flat, while the commodity markets as measured by the Continuous Commodity Index fell 4.4%.

2009 Overview: Key Trends in North American Hedge Funds

July 2009 | Eurekahedge


North American hedge funds (NAHFs) have been among the best performing hedge fund managers over the past two years; since the meltdown of the US subprime mortgage markets and spillover of resultant credit crises into other asset classes. The Eurekahedge North American Hedge Fund Index has returned a healthy 5.2% over the two years since June 2007, while the S&P 500 was down 38.8% over the period.

Opportunities in the Changing Landscape of Emerging Hedge Fund Managers

July 2009 | Andrew Godfrey and Dan Barnett, Revere Capital Advisors LLC


Despite the turbulence and trauma that 2008 exacted on the hedge fund industry, there are those who argue that the financial markets have generated an extraordinary set of business and investment opportunities. Nowhere is this more prevalent than in the emerging manager space, as the current quality of managers looking to start or re-launch a new hedge fund, coupled with the scarcity of capital, means that active seeders can be very selective. Although it is essential for emerging managers to work with a strategic partner today (given the lack of credibility in hedge funds, costs and expertise associated with operating a fund), managers should be equally as selective when choosing a partner.

Ireland Expands Its Role as a Regulated Fund Centre

July 2009 | John Hamrock, Kinetic Partners


Thanks to Ireland’s dedication to providing cost-effective, efficient and highly skilled fund administration, its global reputation as a leader in international investment management continues to expand. Clearly, recent events have required hedge funds to question existing business models and investors to increasingly seek greater transparency. This increased scrutiny has furthered Ireland’s strong industry position. With €1.4 trillion in total assets under administration, half of which is comprised of hedge fund administration, Ireland continues to demonstrate its strength and future potential.

Asian Hedge Fund Awards 2009

June 2009 | Eurekahedge


Thank you all for attending our hedge fund awards on 29 May. I think we can all agree that the evening was a huge success with 250 guests and nine happy winners who fully deserved their awards for navigating the tricky markets of 2008 and early 2009. The full list of winners and nominees are below.

Hedge Fund Performance Commentary

June 2009 | Eurekahedge


Hedge funds produced record returns in May, with the Eurekahedge Hedge Fund Index up a remarkable 5.4% - its best monthly return in almost a decade. The month’s performance was achieved on the back of strongly rallying equity markets – which surged for the third consecutive month (the MSCI World Index rose 8.6%) amid increasing investor sentiment and healthier risk appetites. Hedge funds also saw net inflows in May, the very first time in 10 months; redemptions of US$8 billion were more than offset by gross inflows of 19.3 billion during the month.

Hedge Fund Performance Commentary

May 2009 | Eurekahedge


The Eurekahedge Hedge Fund Index rose a strong 3.1% in April, as the equity markets continued rallying strongly from their oversold levels, fuelled by large-scale buying amid strengthening risk appetites. The MSCI World Index rose 10.9% during the month, partly owing to 1Q2009 earnings reports having beaten expectations. However, on a year-to-date (YTD) basis, hedge funds are up 4% in the first four months of 2009, while the aforementioned equity index remains in negative territory for the period.

2009 Overview: Key Trends in Latin American Hedge Funds

May 2009 | Eurekahedge


The Latin American hedge fund space has seen exponential growth over the past decade, with the number of funds and assets therein having recorded an almost four-fold and a remarkable 23-fold increase respectively, between end-2000 and end-2007. The Eurekahedge Latin American Hedge Fund Index recorded impressive returns of 20.6% (annualised) during the period. However, the industry shrank over 25% in terms of assets during 2008, against the backdrop of slowing global economic growth, weakening credit markets, diminishing risk appetites and record-high redemptions out of hedge funds (US$12 billion from Latin America and US$219 billion globally).

High Sharpe Ratios and High Leverage Help Hedge Funds Survive

May 2009 | Irene Aldridge, Able Alpha Trading Ltd


In an article dated 24 January, Newsweek estimates that of the 8,000 hedge funds that existed in January 2008, 2,000 went out of business by January 2009 and another 2,000 will disappear by January 2010. What determines which funds stay in business and which funds will go by the wayside?

Pre-IPO Deals Haunt Companies

May 2009 | Sanat Vallikappen, Mint


Investments made by private equity funds, hedge funds and other investment vehicles in companies that had been planning to raise money from the capital markets through initial public offerings (IPOs) have come back to haunt the founders of many such firms. Companies owe their investors at least Rs4,000 crore for their inability to come out with IPOs within a specified time frame, a precondition for such investments, according to a Mint analysis of data provided by Nexgen Capitals Ltd, the investment banking arm of Delhi-based stock broker SMC Global Securities Ltd.

Hedge Fund Performance Commentary

April 2009 | Eurekahedge


The composite Eurekahedge Hedge Fund Index rose a strong 1.4% in March, finishing 1Q2009 up 1%, in contrast to the MSCI World Index which is down 12.5% for the quarter. The month’s gains were delivered against a backdrop of sharp reversals in the underlying markets – equities rose 7.2% during the month, due to action from governments and policy-makers across the board, coupled with encouraging news about the profitability of major US banks. Commodities rose 4.4%, as measured by the Continuous Commodity Index, with crude oil, energy and agricultural commodities driving the markets, during the month.

2009 Overview: Key Trends in European Hedge Funds

April 2009 | Eurekahedge


After growing at a rapid pace for the past decade, the European hedge fund industry in 2008 shrank against a backdrop of heightened recessionary pressures and record levels of volatility across most asset classes. Based on the data of 2,3741 operational and 983 obsolete funds in the Eurekahedge European Hedge Fund Database2, we believe there are currently 2,291 funds investing in Europe, managing US$300 billion in assets. This marks an increase of 58% in the number of funds and 133% in terms of assets, since the end of 2003. Up until 2008, the marked difference in the growth rates suggests a sharp increase in the average size of hedge funds in the region over the years, owing to superior risk-adjusted return which led a strong inflow of capital into the industry.

Hedge Fund Interview with Aaron Smith, Managing Director of Superfund Financial (Singapore) Pte Ltd

April 2009 | Eurekahedge


The Superfund group of investment companies was founded in 1995 by Christian Baha in Vienna, Austria, and are now among the world’s largest providers of managed futures funds. In March 1996, members of the Superfund group of investment companies launched the first fund for private investors. By 1997, with further refinement, the award-winning Superfund trading strategy emerged, resulting in a fully automated approach to trading.

The Pros and Cons of Passive Hedge Fund Replication

April 2009 | Noel Amenc and David Schroder, EDHEC Risk and Asset Management Research Centre


The remarkable rise of the hedge fund industry in the last decade of the twentieth century would not have been possible without the great demand of wealthy private clients for sophisticated investment opportunities. Institutional investors, by contrast, long remained reluctant to invest in hedge funds. Although clearly drawn to the returns and the risk reduction potential of these investments, they have only recently started to shift a part of their assets to hedge funds.

Looming Changes in Hedge Fund Regulation

April 2009 | Mark Stoutenburg and Lawrence Cohen, Gibbons


The ongoing financial meltdown has resulted in intense scrutiny of the existing financial industry regulatory scheme, with calls for greater regulation coming from all quarters. Hedge funds have found themselves in the crosshairs in both the US and Europe; and increased regulation of hedge fund managers and the funds they advise is inevitable.

Sustainable and Responsible Investing - Taking Steps, Leaping Ahead

April 2009 | Erik Eidolf, Harcourt AG


Amongst a backdrop of turbulent financial markets, the concept of sustainable and responsible investing (SRI) is continuing to develop at a rapid pace. An ever–increasing number of institutional investors around the globe consider and implement SRI in their investment practices. This also presents opportunities for hedge funds to cater to an increasingly SRI-oriented client base. This article describes the most recent developments within the SRI industry, the prevailing current trends, as well as the effects this is expected to have on hedge funds.

Hedge Fund Performance Commentary

March 2009 | Eurekahedge


Hedge funds had another month of strong outperformance to the underlying markets with the Eurekahedge Hedge Fund Index down 0.8%. In contrast, the MSCI World Index shed 10.5% during the month while the Reuters CRB Index lost close to 4%. The month’s negative return was realised against the backdrop of concerns surrounding the solvency of some major financial institutions and talks regarding the nationalisation of distressed US banks, which, despite the approval of the US$787 billion economic stimulus package in the US, spooked equities across the board. Furthermore, deepening recessionary pressures across some major economies and the resultant negative economic news flow took a toll on the markets; for instance, the news of a record Japanese trade deficit impacted regional equities causing a sharp depreciation in the yen.

2009 Overview: Key Trends in Asian Hedge Funds

March 2009 | Eurekahedge


Hedge funds across the board faced a rough year through 2008, with Asian managers being no exception. The average Asian hedge fund, as measured by the Eurekahedge Asian Hedge Fund Index, fell 21.1% in 2008, with the region’s hedge fund industry shrinking by nearly US$50 billion (28%) in terms of assets. Based on the data of over 1,160 hedge funds in the Eurekahedge Asian Hedge Fund database, we estimate the size of the Asian hedge fund industry at 1,117 funds managing US$126 billion in assets as at end-2008.

Hedge Fund Interview with Dermot Butler, Chairman of Custom House Global Fund Services Ltd

March 2009 | Eurekahedge


Dermot Butler, Chairman of Custom House Global Fund Services Ltd (CHGFS), has more than 35 years’ experience in the financial services industry. Butler has worked as both a stockbroker and stock jobber (market-maker or specialist) on the London Stock Exchange; and subsequently, as a commodity broker and as a principal dealer in commodity options on the London Metal and London Commodity Exchanges.

Hedge Fund Interview with Michael J Liang, CIO of Foundation Asset Management

March 2009 | Eurekahedge


Foundation Asset Management (HK) Ltd, regulated by the Securities and Futures Commission Hong Kong, is an independent China-focused asset management company, committed to maintaining a focus on absolute returns and delivering comparative performance through a disciplined risk-adjusted investment process in all markets. In this interview, Eurekahedge speaks to its hedge fund manager and CIO, Michael J. Liang.

India-focused Hedge Funds in for Long Haul

March 2009 | Hung Tran, FINalternatives


It is no secret that emerging markets hedge funds, specifically those focused on India, fell from their apex last year and took a beating along with the rest of the industry. Funds of all strategies and sizes dropped between 28% and 88% during the course of the year.

Quality is Key for Hedge Fund Operations

March 2009 | Marshall Saffer, Vitoes Fund Services


The past year has been a difficult one for hedge funds. Market conditions, regulatory emergency orders and volatility all affected the ability of funds to develop and maintain strategies that made for consistent performance. Even in that context, funds tended to perform “better” (meaning performing less worse) than traditional asset managers.

The Pioneering Role of Hedge Funds

March 2009 | Dr Arjuna Sittampalam, EDHEC Risk and Asset Management Research Centre


Hedge funds are being vilified for poor performance and are threatened with heavy regulation. Amidst all this negative comment, it is salutary to remember the hedge funds’ pioneering and dynamic contribution to the investment management industry, as well as their substantial positive social contribution. It will be a pity if the heavy hand of regulation destroys the benefits they bring to asset management, the wider economy and society.

The Hedge Fund Industry 2009 and Beyond: A Roadmap

March 2009 | Christophe Gr??nig and Marcel Herbst, Harcourt AG


2008 will be long remembered as the year of the liquidity crisis. Within a few months, the competitive landscape of global financial intermediaries was reshuffled. With credit markets frozen, the main equity markets suffered decline of 40% or more and continue to display staggering volatility not seen in generations. The most visible early casualties of the crisis were the large independent investment banks. With governments in Europe and the US now being shareholders in a wide array of financial institutions, the financial world has changed for good. And it is reasonable to expect that more changes are on the way. These tumultuous times have a profound and lasting impact on the hedge fund industry.

Asset Flows Update

February 2009 | Eurekahedge


January was a positive month for hedge funds, as managers outperformed the underlying equity markets and most strategies finished the month in the black; the Eurekahedge Hedge Fund Index returned 0.2%. This translated into US$2 billion net performance-based increase in assets during the month, which was, however, negated by net redemptions of US$71 billion through January.

2009 Overview: Key Trends in Global Hedge Funds

February 2009 | Eurekahedge


After a very strong 2007, hedge funds faced a challenging year in 2008 (particularly the latter half) in the face of high volatility, collapsing banks, drying up liquidity, heightened investor risk aversion and severe redemption pressures. Against this backdrop, hedge funds had their worst year on record with the Eurekahedge Hedge Fund Index ending the year down 12.5%.

Raising the Bar for Hedge Funds

February 2009 | Stanley Goldstein, New York Hedge Fund Roundtable; and Frank Plantan, University of Pennsylvania


Even the best economists have trouble explaining the recent unravelling of global financial markets. Headlines suggest a lack of focus in Washington and on Wall Street. This has contributed to a crisis of confidence not only in our policy makers but also the system itself.

Hedge Funds Frustrated by Investors, Not Markets, in 2008

February 2009 | FINalternatives


While the bulk of the hedge fund industry suffered from drawdowns and redemptions last year, a handful of non-household funds actually generated the absolute returns that they are, by definition, after. But these under-the-radar managers say their relatively strong performances have still not won them an audience with all-important institutional investors.

Hedge Fund Reporting Survey – November 2008

February 2009 | Felix Goltz and David Schroeder, EDHEC Risk and Asset Management Research Centre


Like any investors, investors in hedge funds are naturally interested in knowing how hedge fund managers allocate their initial investment, and whether this allocation yields positive returns or not. It is not only information on past investment returns that is of particular interest; prospects for future gains or losses are relevant to investors as well.

Lessons Learned from 2008: Hedge Funds Need to Diversify Custodial, Operational Risk

February 2009 | Michael Murray, Shoreline Trading Group


There is little doubt that the events of 2008 will have long lasting effects on the asset management industry. Additional oversight and regulatory statutes are a given as a result of this tumultuous year and asset managers around the globe have had to reassess their investment and operational strategies.

Hedge Fund Asset Flows – 2008 in Review

January 2009 | Eurekahedge


2008 has been an arguably rough year for hedge funds. Over 20%, or US$384 billion, has been shaved off the total value of hedge fund allocations globally, and industry assets have dipped below their December 2006 levels (US$1.54 trillion) for the first time in December 2008 (to US$1.5 trillion). Investment losses accounted for US$185 billion of the decline, while net asset outflows from fund liquidations and investor redemptions made up for the balance of US$198 billion.

Hedge Fund Performance Commentary

January 2009 | Eurekahedge


December has traditionally been a positive month for hedge funds, and 2008 was no different; the Eurekahedge Hedge Fund Index returned a healthy 1%1, positive for the first time since May 2008. The month’s gains came despite a continued decline in the global economic outlook in December and negative repercussions from the Madoff scandal. The latter meant that redemption pressures continued to be an issue despite improved performance and the fact that more funds locked-in their investors during the month.

2009 Overview: Key Trends in North American Hedge Funds

January 2009 | Eurekahedge


The Eurekahedge North American Hedge Fund Database contains data on 3,850 funds, based partly on which, we estimate the current size of the region’s hedge fund industry at 4,670 funds, managing about US$1 trillion in assets. This, despite a decline in both the number of funds and assets through 2008, marks an annualised increase of 6% and 12% in the number of funds and AuM respectively, since end-2003. Figure 1 shows the growth in the region’s hedge fund space over the past decade.

Quant Hedge Funds Rise in Falling Markets

January 2009 | FINalternatives


Quantitative hedge funds that were posting miserly returns just last summer are now taking it to the market. These funds are trouncing their fellow hedge funds and the broader markets, and some are on pace for their best year ever.

Quant Hedge Funds Rise in Falling Markets

January 2009 | FINalternatives


Quantitative hedge funds that were posting miserly returns just last summer are now taking it to the market. These funds are trouncing their fellow hedge funds and the broader markets, and some are on pace for their best year ever.

2008 Returns in Perspective – The Difference between Small and Large Hedge Funds

January 2009 | Serge Berger, AlternativeSoft


As we look back at the untamed securities markets that defined 2008, we naturally have to ask ourselves which asset classes performed the least poorly. To do this, we use the software platform on AlternativeSoft, which enables us to run statistics on individual funds, as well as on a group of hedge funds. Using ‘Asset Search’ function, we divided the assets under management (AuM) of the hedge fund universe into four buckets of different sizes as shown in Table 1 below.

Hedge Fund Performance Commentary

December 2008 | Eurekahedge


The Eurekahedge Hedge Fund Index has continued its negative streak for the sixth month in a row, falling 0.7%1 as November saw the continuation of several of the dominant themes from September and October: distressed selling, deleveraging and redemptions among hedge funds, heightened volatility and an increasing disconnection between asset prices and underlying fundamentals, and economic data exacerbating the recessionary growth outlook. In fact, it is commendable that, in this worsening investment environment, month-to-month losses for the Eurekahedge Hedge Fund Index have been the least negative in the last five, while net redemptions are also slightly down from previous monthly highs.

Hedge Fund Interview with Todd Gorelick, Managing Partner of Gorelick Brothers Capital

December 2008 | Eurekahedge


Gorelick Brothers Capital, established in 2003, manages the Morrocroft Special Opportunity Fund I, a hybrid fund of funds with a private equity structure, focused exclusively on real estate credit strategies. The firm’s investment team has decades of experience in subprime consumer lending, residential mortgage information and settlement services, structured credit securitisation and trading, and commercial real estate investment and analysis. The firm also manages the Morrocroft Diversified Fund, a multi-strategy fund of hedge funds launched in 2005 with a wealth preservation mandate.

Hedge Funds Poised For High Yield Opportunities

December 2008 | Mesh Tandon, Simran Capital


While central banks have injected US$3 trillion into the global economy in the past two months, high yield corporate credit markets are still in a state of decline. Despite some signs of credit loosening in the commercial paper and other high-grade markets, banks and capital markets continue to clamp down on lending to companies further down the credit curve.

The Current Market for Hedge Funds

December 2008 | Christopher Miller, Allenbridge HedgeInfo


Key points: 1. Hedge funds are not all the same, but deleveraging and redemptions are very common issues at the moment. 2. Remember the three Ds – Diversification, Due diligence and Darwinism. 3. The overhang of potential redemptions towards the end of 2008 could stress popular hedge fund strategies. 4. For crowded strategies, subscriptions or the end of deleveraging could be very positive, but more redemptions, further deleveraging or shutdowns could cause further losses. 5. Change brings opportunity. Seek out the less crowded trades and more innovative strategies.

Hedge Fund Performance Commentary

November 2008 | Eurekahedge


The Eurekahedge Hedge Fund Index shed 3.9% in October, amid supremely choppy markets (the volatility index, VIX, breached a record-setting 90 points during the month), brought on by an environment of tightening credit conditions and heightening expectations of a global economic slowdown; the MSCI World Index and the Reuters CRB Index shed 19.1% and 18.3% respectively.

2008 Overview: Key Trends in Latin American Hedge Funds

November 2008 | Eurekahedge


The Latin American hedge fund space has seen remarkable growth over the past decade. The number of funds as at September 2008 was nearly four times that as of end-2000, while assets over the same period recorded an over 21-fold increase. Based on the data of 462 funds1 in the Eurekahedge Latin American database, we estimate there are currently 403 operational hedge funds, managing about US$52 billion in assets, across the region’s hedge fund industry as at September 2008. The figure below gives a snapshot of the industry growth over the past decade.

Hedge Funds: Quality Returns in Bear Markets

November 2008 | Eurekahedge


The financial landscape has permanently changed after the historic events of September 2008, and markets are seized up by a crisis of investor confidence. Major central banks have been struggling to quell market fears, inject liquidity, cut rates and kick-start growth in the face of the steady stream of negative economic data and an increasingly recessionary outlook for the global economy (Germany, Europe’s largest economy, has officially fallen into recession after its GDP shrank for the second consecutive quarter in 3Q2008).

A Year of Crisis: Have Hedge Funds Kept Their Absolute Return Promises?

November 2008 | Philippe Malaise, EDHEC Business School


The financial crisis that began more than a year ago now, after the sudden fall in the prices of investments backed by subprime loans, sent shockwaves through the markets, with unprecedented write-downs of asset values continuing to undermine the foundations of the banking system and leading to a pronounced economic slowdown. The great increase in risk aversion ultimately led to great adjustments in the stock markets. Since the initial falls of June 2007, the major stock market indices have posted losses in the double digits. Volatility has increased abruptly; in the first quarter of 2008 it was twice its second quarter 2007 low.

Hedge Fund Investing in a New World

November 2008 | Castle Hall Alternatives


The credit crisis which first began in mid-2007 – with the failure of a hedge fund managed by Bear Stearns – has now accelerated to create the most severe financial market dislocation since the Great Depression. It goes without saying that, after the events of the past 18 months, markets will not be the same: both investors and money managers will face a “New World“.

Pension Funds Pull Back from Hedge Funds

November 2008 | FINalternatives


Hedge funds and funds of funds are seeing an increase in redemption notices as the industry plunges deeper into the red amidst regulatory constraints and the global credit crisis. And while hedge fund managers are watching the notices flood in, pension fund investors are pulling back from their hedge fund commitments. The US$11 billion School Employees Retirement System of Ohio has decided to shelve its hedge fund investments, which currently stand at US$258 million, according to Laurel Johnson, a spokesperson for the plan. Johnson said the plan, which is allowed to invest up to 10% of its assets in hedge fund strategies, is “moving very slowly toward reaching that ceiling” because of problems in the financial markets.

Investors Keener on Structuring Alternatives

November 2008 | Nick Ferguson, FinanceAsia


Institutional investors in Asia are increasingly finding that structured products are a useful way to buy exposure to hedge fund returns. Driven by market volatility and a greater focus on capital treatment, insurers and financial institutions are increasingly buying funds of hedge funds with principal-protected wrappers. They are also using derivatives and structured products to switch hedge fund investments into their local-currency allocation or even to make them Shariah-compliant.

Islamic Shorting: Trend or Hype?

November 2008 | Michael Mahlknecht, Delta Hedge


While short-selling is not permitted by the Shariah, more and more Islamic institutions and hedge funds claim to offer Shariah-compliant shorting solutions. Islamic short-selling is often being presented as if it were a major innovation or a significant breakthrough for Islamic finance. In reality, however, basically every contract can be ‘Islamised’ using concepts from modern financial engineering. The question is rather how high the transaction costs are, and, especially, whether one regards such mechanics as Shariah-compliant, or as just an undesirable ploy, which strikes at the foundations of the objectives of Islamic finance.

Hedge Fund Performance Commentary

October 2008 | Eurekahedge


The Eurekahedge Hedge Fund Index lost 4.6% in September, bringing average returns for the first nine months of 2008 to -7.7%, as hedge funds were able to stem drawdowns in a month that saw the S&P500 make its biggest single-day fall since 1987 (eventually finishing September down 9.1%), crude oil prices go into double-digit declines and the Dow Jones-AIG Commodity Index shed 11.6% on the month.

2008 Overview: Key Trends in European Hedge Funds

October 2008 | Eurekahedge


The European hedge fund industry has grown at a rapid pace over the past decade, with an 11-fold increase in the number of funds and a handsome 60-fold increase in assets. Based on the information of 3,150 funds in the Eurekahedge European Hedge Fund Database, we estimate 2,361 operational hedge funds within the region’s hedge fund space, managing assets to the tune of US$445 billion. The following graph charts the growth of the industry over the past decade.

Hedge Fund Interview with Kai Jiang, Portfolio Manager and Director of ChinaFund Cayman (previously known as DragonFund)

October 2008 | Eurekahedge


ChinaFund Cayman Ltd, a limited exempted company organised under the laws of the Cayman Islands, is a private hedge fund with offices in Chicago and Shanghai. Previously known as DragonFund LP, it has a track record of more than ten years of trading. The fund invests globally with a special focus on Chinese ADRs and Hong Kong shares as well as US equities with significant assets, investments, production activities, trading or other business interests in China, or which derive a significant part of their revenue from China.

Prime Brokers Benefit From Market Turmoil

October 2008 | FINalternatives


While hedge funds struggle to navigate choppy regulatory and market waters, one group of financial professionals is feeding off the frenzy in a big way. Some prime brokers are enjoying an increase in business from hedge fund clients that have been left blowing in the wind by the demise of Lehman Brothers Holdings and others that are scared to swim in the murky waters surrounding Morgan Stanley.

Change in the Air for Fund of Funds Fee Structures

October 2008 | Brad Balter, Balter Capital Management


Funds of hedge funds (FoHFs) have been and will continue to be an integral part of hedge fund investing. While many investors can and have chosen to bypass FoHF structures in order to invest “direct”, for the past ten years assets under management (AuM) under the FoHF structure grew faster than AUM for all hedge funds combined. The reasons for this impressive growth are obvious. FoHFs provide diversity among managers, reduce risk and hold out the promise of net returns higher than the average hedge fund. The long list of casualties in the hedge fund industry and recent high-profile hedge fund losses have also driven investors toward the security provided by a FoHF.

Funds of Funds: the Elderly are Vibrant – as Long as They Grow up First

October 2008 | Christopher Holt, AllAboutAlpha.com


American novelist Mark Twain once wrote that ageing was “an issue of mind over matter. If you don’t mind, it doesn’t matter.” While this may be sage advice for most of us, it’s apparently not applicable to hedge funds of funds. A recently updated study by Roland Füss of the European Business School, Dieter Kaiser of the Frankfurt School of Finance & Management and Anthony Strittmatter of the University of Freiburg finds that ageing has a dramatic impact on returns.

Asset Flows Update

September 2008 | Eurekahedge


August was another volatile month in the underlying equity and commodity markets, with the MSCI World Index and the Reuters CRB Index down 1.6% and 5.6% respectively. Against this backdrop, the Eurekahedge Hedge Fund Index shed 1.2% in course of the month, with assets within the industry recording a similar decline (in percentage terms). The AuM of the hedge fund industry as at the end of August 2008 was US$1.9 trillion, with both negative performance and redemptions responsible for the decline.

Hedge Fund Performance Commentary

September 2008 | Eurekahedge


Hedge fund performance in August was characterised by loss mitigation and short-term trading, as persisting concerns over a global economic slowdown produced yet another month of mixed returns across most asset classes. The composite Eurekahedge Hedge Fund Index shed 1.2% for the month, even as global commodities (CRB) and equities (MSCI World) dropped 6% and 1.6% in value, respectively. Returns from hedge fund regional and strategy mandates were negative across the board, and the biggest losses (on average) came from directional equity and emerging market allocations.

2008 Overview: Key Trends in Asian Hedge Funds

September 2008 | Eurekahedge


The Eurekahedge Asian Hedge Fund database contains data on over 1,5701 funds, based partly on which, we estimate 1,204 operational hedge funds in the Asian hedge fund industry, managing assets to the tune of US$171 billion, as at the end of July 2008. The industry has grown at a robust pace over recent years both in terms of assets as well as number of funds – assets have increased by over three and a half times, while the number of funds has more-than-doubled since December 2003.

Hedge Fund Launches at a 9-year Low

September 2008 | Eurekahedge


As the financial markets continue to be roiled in a credit crisis that has sent volatility up across the board for nigh on one year, its impact is starting to show tellingly on the hedge fund industry – if not on the performance1 or asset flows front, then on the fund launch and liquidation front. The first half of 2008 has seen not only the lowest launch activity (272 funds), but also the highest number of liquidations (243 funds) during any comparable period over the past nine years.

Considering Hedge Funds in a LDI Perspective

September 2008 | Dr Gabriele Susinno, Unigestion


The sequence of adverse financial events characterising the market behaviour of the new millennium has forced institutional investors, such as life insurances and pension funds, to revisit the paradigms applied to manage the asset over liabilities equilibrium. Indeed, potential difficulties embedded in periods of bear equity markets and falling interest rates combined with the increasing longevity (in Western countries life expectation increases by one year every four years) and new accounting rules have fostered the pace at which institutional investors are revisiting the potential synergies between the two fundamental poles of competence: actuary and asset management.

Alternatives Investors Look for More than Returns

September 2008 | Justin Ong and Darren Lim, PricewaterhouseCoopers (Singapore)


Asia has experienced rapid growth in alternative investments in recent years, fuelled by investors’ search for increased alpha in emerging markets and by institutional players broadening their investment horizons to diversify geographical risk. Assets allocated to hedge funds, private equity and, increasingly, real estate and infrastructure funds have seen significant growth. This has led to alternative assets starting to become part of the investment mainstream.

Asset Flows Update

August 2008 | Eurekahedge


Hedge funds saw net inflows of US$5.8 billion in July, which were more than offset by negative returns across the industry. The Eurekahedge Hedge Fund Index shed 2.2% on the month, against a backdrop of persistent volatility in the underlying markets. The month saw marked reversals across some key asset classes – commodity prices fell significantly (the Dow Jones-AIG Commodity Index lost 12%, on the month) primarily on concerns of falling demand, while equities rebounded from their intra-month lows (of -5.6% for the MSCI World Index) to close the month down 2.5%.

Hedge Fund Performance Commentary

August 2008 | Eurekahedge


Hedge funds reined in their losses in July, as global financial markets witnessed sharp declines and reversals across major asset classes; the Dow Jones-AIG Commodity Index fell 12%, while the MSCI World Index, after shedding 5.6% intra-month, finished the month down 2.5%. By comparison, the Eurekahedge Hedge Fund Index declined by a relatively modest 2.5% , on the month.

2008 Overview: Key Trends in Global Hedge Funds

August 2008 | Eurekahedge


Hedge funds continue to attract capital amid turbulent markets and slowing global economic growth, as lowered risk appetites drive investors to seek superior returns for their risk dollars. We currently estimate the size of the global hedge fund industry at near 8,200 single manager funds that together manage assets to the tune of US$1.95 trillion (as at end-June 2008), and expect industry assets to breach the US$2 trillion barrier by end-2008. Figure 1 illustrates the pattern of growth traced by single-manager funds over the past decade.

Asset Flows Report

August 2008 | Eurekahedge


Hedge fund managers saw net inflows of US$66 billion, during the first half of 2008, bringing their assets under management (AuM) to a solid US$1.95 trillion as at June 2008. These inflows were evident despite harsh movements in the underlying markets, as commodity prices soared (the Reuters CRB Index rose 25%) and equities fell dramatically (the MSCI World Index shed 11.8%) during the period. Furthermore, the slowing of economic growth coupled with rising inflationary concerns negatively impacted investor sentiment, thereby taking a toil on underlying markets. Managers, however, did a good job of protecting capital during the period, as the Eurekahedge Hedge Fund Index remained flat (0.1%).

Interview with Simon Sadler, CIO of Segantii Capital Management Ltd

August 2008 | Eurekahedge


The Segantii Asia-Pacific Equity Multi-Strategy Fund invests in Asia-Pacific equity markets with an emphasis on North Asia ex-Japan. The fund has a multi-strategy approach and the strategies include relative value, opportunistic events and catalyst driven long short. The fund aims to generate absolute returns by:

PerTrac Research Confirms that Emerging Hedge Fund Managers Outperform Older, Larger Funds

August 2008 | PerTrac Financial Solutions


PerTrac Financial Solutions today announced the results of its updated Emerging Manager Study, originally released in March 2007, confirming again the widely held belief that emerging hedge funds perform better than older, larger funds. The company makes the popular PerTrac Analytical Platform, the world’s leading investment analysis and asset allocation software.

The Climate for Hedge Funds in the GCC

August 2008 | Antoine Massad, Man Investments Middle East


The turmoil in global financial markets since last year has set an intriguing backdrop for examination of hedge funds in the Middle East region. After more than two decades of using hedge funds, private client investors from the GCC states have become familiar with their value as a source of additional returns and downside protection in their portfolios. But the financial climate has not often presented as many opportunities and challenges as we see today, according to Antoine Massad.

Hedge Fund Performance Commentary

July 2008 | Eurekahedge


Hedge funds largely outperformed the underlying markets in June, with the Eurekahedge Hedge Fund Index down 0.5% on the month. This decline was seen in the face of wide swings across key asset classes – the MSCI World Index plunged 8.1% on the month, while energy prices witnessed a sharp run up, with crude oil hitting another record high (over US$140 to the barrel at month’s end).

2008 Overview: Key Trends in North American Hedge Funds

July 2008 | Eurekahedge


The total size of the North American hedge fund space is estimated at nearly 4,800 funds managing close to US$1.1 trillion in assets1; operating in the world’s most advanced financial markets, these funds account for nearly two-thirds of the US$1.8 trillion parked in hedge funds globally. Historically too, the North American hedge fund universe has been sizeable (refer Figure 1); to put it in context, their combined size in 2,000 is comparable to the current size of the Asian hedge fund space.

The Dangers of Historical Hedge Fund Data

July 2008 | Andrew B Weisman and Jerome D Abernathy, Stonebrook Capital Management LLC


Hedge fund portfolio managers and consultants make extensive use of historical data for the purposes of manager selection and portfolio construction. The conventional use of historical hedge fund data along with portfolio optimisation techniques will frequently result in portfolios that in practice maximise risk and illiquidity.

Capital Crunch Catches Up with Hedge Funds

July 2008 | Irene Aldridge, FINalternatives


It is no secret that the subprime crisis has cut the amount of capital available to hedge funds. While industry players procure funding from many sources including wealthy individuals, many hedge funds rely on capital introductions and margin lending provided by their prime brokers. But the latest FINalternatives Prime Brokerage Survey conducted in May indicates that prime brokers’ capital introductions and margin lending services come up short in fulfilling client expectations.

Hedge Fund Performance Commentary

June 2008 | Eurekahedge


Hedge funds had another strong month in May, as the Eurekahedge Hedge Fund Index rose 2% during the month, despite persistent inflation concerns weighing on the markets and on investor sentiment. Managers made good gains from equities, which recorded mixed returns across different regions (the MSCI World Index rose 1.1%), and from commodities (as commodities such as crude oil and gas, among others, rallied strongly) during the month. A marginally stronger US dollar (against some major currencies) also translated into some gains, over May.

2008 Overview: Key Trends in Islamic Funds

June 2008 | Eurekahedge


Over the last decade Shariah-compliant funds have emerged as one of the most eloquent expressions of Islamic Finance, exemplifying its evolution into a dynamic and diverse industry. Understanding the issues faced in developing, managing and investing into these financial products constitutes an integral component of Islamic wealth management.

Absolute Return: A Comparative Review of Recent Hedge Fund Performance

June 2008 | Eurekahedge


Persisting turmoil in the global financial markets has led to several media reports in recent months painting hedge funds in a negative light, in terms of performance and/or redemptions. Such reports tend to ignore that there are two sides to the hedge fund performance coin – absolute return and conservation of capital. Some losses may be unavoidable in any period of turmoil, as managers close current positions (be they in response to margin calls or stop-loss triggers), and reallocate funds to safer asset classes.

Hedge Fund Portfolio Pricing Best Practices

June 2008 | Paladyne Systems Inc, Thomson Reuters, NumeriX


The recent recommendations put forward in April 2008 by two private-sector committees established by the President’s Working Group on Financial Markets (PWG) call for much needed changes to valuation policies, disclosure, and accounting practices within the hedge fund industry. Industry experts agree that change is both necessary and imminent, but recognise the significant challenges when it comes to implementing a consistent, transparent and fair pricing methodology throughout the alternative investment management sector.

The 5th Annual Asian Masters of Hedge Awards WINNERS

June 2008 | Eurekahedge


The 5th annual Asian Masters of Hedge Awards was a resounding success last Friday, with over 400 hedge fund managers, investors, and industry participants from around the globe joining us. A total of 21 awards were presented, with Artradis the big winner of the night picking up three awards including best Asian Hedge Fund, Best Multi-Strategy Fund and the Special Achievement Award. The Eastern Advisors Fund, Regal Amazon Market Neutral Fund and The Merchant Commodity Fund also came out on top, each picking up two awards in the geographic and strategic mandate categories.

Hedge Fund Performance Commentary

May 2008 | Eurekahedge Research


Hedge funds started the second quarter of 2008 on a strong note, as the composite Eurekahedge Hedge Fund Index rose 1.5%1 on the month. Rallying equity markets, on the back of a sharp increase in risk appetites, coupled with marked reversals across some other asset classes – such as bonds and currencies – were among the factors responsible for the month’s gains. Furthermore, the Fed’s aggressive response (in the form of rate cuts and assistance in the Bear Stearns bailout in March) to the weakness across credit markets and the slowing of economic growth in the US, went some way in improving investor sentiment during April.

Asset Flows Update

April 2008 | Eurekahedge Research


March was a difficult month for hedge funds across the board, with performance-based declines in assets among most strategies and redemptions in some; the composite Eurekahedge Hedge Fund Index shed 1.9%1.

Hedge Fund Performance Commentary

April 2008 | Eurekahedge Research


After registering impressive gains in February, hedge funds faced a difficult month in March against the backdrop of persistent concerns on the slowing of global growth and the likelihood of a recession in the US. The composite Eurekahedge Hedge Fund Index shed 1.9%1. Volatility across the underlying markets, particularly prior to the Fed’s 75 bps rate cut on 18 March, coupled with a weak state of the credit markets, were among the factors responsible for the month’s losses. The Bear Stearns collapse and its subsequent takeover by JPMorgan (with assistance from the Federal Reserve), along with additional write-downs by major global investment banks, further weighed on the markets.

2008 Overview: Key Trends in Asian Hedge Funds

April 2008 | Rajeev Baddepudi Eurekahedge


The 2008 edition of the Eurekahedge Asia and Japan Hedge Fund Directory covers over 860 flagship funds and is the epitome of its online counterpart, which covers 1,1501 Asian hedge funds2. Based on this and related information, we currently estimate the total size of the Asian hedge fund universe at US$160 billion as of end-2007, up 21% from our end-2006 estimate of US$132 billion. Judging by this, the performance of the Eurekahedge Asian Hedge Fund Index (19% for 2007 and 12% annualised) and the general growth of the industry over the last decade (see Figure 1), the Asian hedge fund space continues to be on a robust growth curve on both counts – number of funds and size of assets.

Hedge Fund Valuation Standards: Evolution not Revolution

April 2008 | The Bank of New York Mellon Corporation, Kinetic Partners


The demand for alternative investments such as hedge funds is increasing dramatically. Institutional and retail investors alike are attracted to the investment opportunities offered by hedge funds and the prospects of higher returns, compared to traditional investment funds. However, in times of tighter credit and market volatility, all that glitters is most certainly not gold. It is becoming ever harder to generate alpha or, from an investor’s perspective, to pick a fund which will generate genuine alpha.

The Year of the Activist Hedge Fund

April 2008 | Damien Park, President and CEO Hedge Fund Solutions


For the past year, people have speculated activist-style investing would go the way of the Internet boom and bust witnessed earlier this decade. However, despite a weaker economic outlook, shaky credit markets and a subprime turmoil upending financial markets worldwide, activist hedge funds continue to grow at remarkable rates in both numbers and in assets under management.

The 5th Annual Asian Masters of Hedge Awards

March 2008 | Eurekahedge, Hedge Funds World


The 5th annual Asian Masters of Hedge Awards was a resounding success last Friday, with over 400 hedge fund managers, investors, and industry participants from around the globe joining us.

Asset Flows Update

March 2008 | Eurekahedge


As hedge funds bounced back in February across the board, with most strategies recovering most or all of January’s lost ground (the composite Eurekahedge Hedge Fund Index advanced an impressive 2.9%), data of February 2008 assets under management (AuM) from early reporting funds to the Eurekahedge databases suggests that hedge funds globally raised their total assets to the tune of US$5 billion in performance-based growth, and another US$1.5 billion in net investor inflows. This translates to an estimated 0.4% rise in global hedge fund assets, to US$1.64 trillion . Asset flows during the past two months are summarised in Figure 1 below.

Hedge Fund Performance Commentary

March 2008 | Eurekahedge


After a shaky start to the year, hedge funds bounced back in February across the board, with most strategies recovering most or all of January’s lost ground. The composite Eurekahedge Hedge Fund Index advanced an impressive 2.9%1, with all regions recording positive returns during the month. This was despite concerns surrounding a global economic slowdown (and fears of a recession in the US) weighing on most regional markets.

2008 Overview: Key Trends in Funds of Hedge Funds

March 2008 | Eurekahedge


The 2008 edition of the Eurekahedge Global Fund of Hedge Funds Directory contains information on close to 2,400 funds1. Based on this and related information, we estimate the total size of the fund of funds universe at US$747 billion as of end-2007, up 20% from our end-2006 estimate and accounting for over 45% of global hedge fund assets (up from 43% a year ago). Judging by this and the performance of the Eurekahedge Fund of Funds Index (which rose a healthy 10% in each of the past two years), 2007 has, in the main, been a good year for the industry. The industry has seen impressive growth over the past decade – in terms of the number of funds as well as the size of assets – as can be seen from a comparison of year-end numbers charted in Figure 1 below.

Key Trends in the Takaful Landscape

March 2008 | Bernardo Vizcaíno, Eurekahedge


The Eurekahedge Islamic fund database has grown from its launch in 2006 to now encompassing information on more than 550 Shariah-compliant funds, keeping up with an industry that saw 131 new launches in 2007 alone. Despite this healthy growth, takaful-dedicated funds are few and far in between (with notable examples in Malaysia, Singapore and Bahrain). However, this doesn’t properly reflect the emergence of takaful and its importance in the overall Islamic funds industry.

Next Generation Brand Management for Hedge Funds

March 2008 | Miroslaw Izienicki, President Fifth Capital Ltd


With the growth of interest in alternative investments, pressure continues for increased transparency in the operation of hedge funds. As the essence is to minimise opportunities for organisational stakeholders to experience negative surprise, good governance can only be achieved through complete accountability for the factors that drive: i) the search for investment opportunities and ii) the resolution of investment decisions in the face of risk and uncertainty.

Hedge Fund Performance Commentary

February 2008 | Eurekahedge


The composite Eurekahedge Hedge Fund Index fell 3.1%1, posting one of its worst monthly returns in the last several years. The rough start to the year came about as hedge funds across the board had to contend with margin calls amid steep declines in global equities; the MSCI World Index shed 7.7% on the month, with major regional equity indices posting similar losses (Topix -8.8%; S&P 500 -6.1%; FTSE -8.9%; MSCI Emerging Markets -12.6%).

2008 Overview: Key Trends in Latin American Hedge Funds

February 2008 | Eurekahedge


The hedge fund industry in 2007 in Latin America continued on its course of impressive growth over the last few years, in an environment of favourable economic conditions and markets that were increasingly resilient to turbulence in the global economy. Industry assets nearly doubled in the last two years alone and it also turned in some of the best gains among hedge funds globally (the Eurekahedge Latin American Hedge Fund Index has bested all regional Eurekahedge performance indices in terms of annualised returns over the last seven years at 20.4%).

Asset Flow Report

February 2008 | Eurekahedge


This inaugural edition of the Eurekahedge asset flow report collates historical assets under management (AuM) information on a sample of close to 6,400 hedge funds and 2,700 funds of hedge funds listed in the Eurekahedge Alternative Investment databases, in an effort to estimate the size and nature of asset flows in the global hedge fund industry.

Hedge Fund Performance Commentary – Year in Review

January 2008 | Eurekahedge


On the whole, 2007 has been yet another good year for hedge funds, with the composite Eurekahedge Hedge Fund Index up a solid 13.6%. This compares favourably with performance during the last three calendar years – 14.4% (2006), 12.2% (2005) and 10.5% (2004). The year’s performance has weathered credit-related woes and the attendant risk aversion, and drying up of liquidity in the underlying markets, which manifested themselves early in the third quarter of 2007. The ensuing down month (August; -1.9%) was one of only two in the last twelve. The other negative month was November (-2%), largely owing to profit-booking after a pro-active Federal Reserve, and a larger-than-expected 50 bps cut in the interest rates mid-September led to a return of optimism into the markets during the following months.

Hedge Fund Honchos Look To 2008

January 2008 | Hung Tran, FINalternatives


While a number of hedge fund managers this year made astronomical gains shorting subprime mortgages, some believe that the trade may be on its last leg. In fact, they say there are more opportunities to be had in the coming year in higher-grade mortgage securities as well as in the little-known master limited partnership space and the sexier alternative energy market.

Risk-managing Japanese Hedge Funds

January 2008 | Simon Osborne, Asian Investor


In Japan, hedge funds are subject to the highest degree of regulation in Asia, but risk management remains an inscrutable practice. In America, implementation of Basel II is hardly witnessed. In Western Europe, it is not present at all. Yet it is alive and kicking in Japan, and three of the megabanks command IRB status under the Basel II rules. That means the directors of those banks are supposed to understand the nuances of its risk implications. Assuming that they do understand their risk portfolios might be a case of 'Emperor’s New Clothes'. The knee-jerk reaction to Basel II caused a flight from hedge fund investment last year.

All Change as Middle East Gets Out With the Old, In With the New

January 2008 | Solomon Teague, Hedge Funds Review


The Middle East is still better known for its wealthy investors than for its resident hedge fund community, but there are hedge funds operating in the region, hoping to capitalise on proximity to some of the world’s wealthiest investors. Kevin Birkett, asset and fund management director at the Dubai Financial Services Centre (DIFC) notes there are already two small funds present in the DIFC. Local markets are prohibitive for them: it is not possible to short and although there are some synthetic products available they are not liquid enough to be really appealing to hedge funds.

Hedge Fund Performance Commentary

December 2007 | Eurekahedge


After two consecutive positive months amid rising risk appetites and rallying markets, hedge funds across the board gave back some of these gains in November, with the composite Eurekahedge Hedge Fund Index down 1.6%. A key factor in this market turn was re-emerging concerns over problems in the US housing and subprime markets, as it became apparent that the losses suffered by some of the large global financial firms were far greater than expected. This led to large-scale risk aversion among market participants.

Cloning Comes Alive

December 2007 | Narayan Naik, London Business School


It has been a self-serving idea for hedge fund managers and many will have profited extensively by it. If a hedge fund manager delivers genuine alpha performance, he can charge substantial fees in return. But the problem is that not all hedge fund managers have consistently delivered A-grade – or alpha – returns to investors, despite hanging onto their often inflated fees. Sheep in wolves’ clothing? Professor Narayan Naik of London Business School thinks, based on empirical evidence, that this is the case for many hedge fund managers.

Hedge Fund Code of Practice

December 2007 | Dubai Financial Services Authority


This Code of Practice (“the Code”) sets out best practice standards for Operators of Hedge Funds in the DIFC (ie Operators of both Public and Private Domestic Hedge Funds). These are designed to address risks inherent in the operation of Hedge Funds and are set out under 9 Principles as follows:

Hedge Fund Performance Commentary

November 2007 | Eurekahedge


Hedge funds in October had yet another terrific run, with returns upwards of 2% almost across the board. The composite Eurekahedge Hedge Fund Index rose 3.3% for the month, taking the year-to-date gains (15%) past those achieved during the entire year in 2006 (14.4%). Equity- and commodity-focused strategies drove this robust performance during the month, as expectations of further cuts in US interest rates, and the consequent weakening of the US dollar against major currencies, lent strong support to the respective underlying markets.

Building Bridges: Hedge Fund Administrators Prepare For the Future

November 2007 | Jonathan Shazar, FINalternatives


Institutional investors represent an ever-increasing share of hedge fund assets, bringing about a sea-change in the way hedge funds – and hedge fund administrators – do business. “Investors are demanding more frequent reporting and greater transparency, and that’s the biggest change I’ve seen in the industry,” Christine Waldron, vice-president of alternative investment products at US Bancorp, says. “Institutions are driving great accountability and frequency of reporting.”

Equity Long/Short Hedge Funds: How Much Alpha Do They Deliver?

November 2007 | Laurent Favre, AlternativeSoft


In this article, we computed the average alpha of 651 equity long/short hedge funds. We found that, on average, the average annualised alpha per equity long/short hedge fund is 8.8% and the average annualised alternative beta premium per equity long/short hedge fund is 5.0%. This means that on average, the alpha is higher than the alternative beta, during the period 2002 to 2007.

What to Look for in an Independent Director

November 2007 | Geoff Ruddick, International Management Services Ltd


One of the first considerations when looking for an independent director is the underlying reason behind your search. Probably, given the spectacular hedge fund and corporate collapses in recent years, part of the reason is the desire for effective corporate governance. In today’s environment, corporate governance is no longer a luxury, but a necessity, and . Regulators and exchanges are increasing their scrutiny and investors are demanding it – so should you.

130/30 Funds: What is Behind the Commercial Offensive?

November 2007 | Eurekahedge


High-conviction funds, beta-one funds, short extension funds, limited-shorting funds, long-enhanced funds, active extension funds, hedge-fund lite: there is a wide range of terms for what is most frequently called 130/30. Broadly, this strategy initially invests 100% in an index, sells short 30% and uses the proceeds from the shorts to buy an additional 30% likely to beat the benchmark.

Hedge Fund Performance Commentary

October 2007 | Eurekahedge


After a difficult August, hedge funds did a virtual about-face in September – the composite Eurekahedge Hedge Fund Index rose an impressive 3.8%, its best showing in over 12 months – as the Federal Reserve took a pro-active stand against risk aversion and dwindling liquidity in the markets, and cut its Fed Funds rate by a larger-than-expected 50 bps mid-month. This triggered a global rally in the equity markets (the MSCI World Index was up 4.6% for the month) and tightened credit spreads.

2007 Overview: Key Trends in North American Hedge Funds

October 2007 | Eurekahedge


The 2007 edition of the Eurekahedge North American Hedge Fund Directory is printed with over 1,900 flagship funds and represents the epitome of its online counterpart, which covers 3,2381 hedge funds that currently allocate to and/or are managed out of North America. Together with this and other related information, we estimate the total size of the North American hedge fund space currently at nearly 4,800 funds managing over USD900 billion in assets. Operating in the world’s most advanced financial markets, these funds account for over half of the USD1.7 trillion parked in hedge funds globally.

Fund Set-up in Singapore

October 2007 | Nigel Poh, Eurekahedge


Differing definitions of a hedge fund abound (which are sometimes confused with other funds such as private equity or real estate investment pools) but for our purposes, and with the view of setting up an international hedge fund in Singapore, the following assumptions are made: that it is deemed to be a “collective investment scheme” as described by the Securities and Futures Act of Singapore, and will have a strategy of investing in instruments where valuations are readily discernable with minimal dispute (such as listed equities, bonds); and that the manager is remunerated generally on a manager fee based on the entire value of assets under management, as well as an incentive fee based on a proportion of profitable capital gains made from those assets. The offerings are not meant for the general public but for accredited investors and operate within strict limits to general solicitation and advertising.

How the New Deferred Compensation Regulations Affect Hedge Funds

October 2007 | David P Simonetti, Grant Thornton


Sec 409A of the Internal Revenue Code of 1986 (the Code), as amended, was enacted on 22 October 2004, and made significant changes to the rules governing non-qualified deferred compensation plans. The new rules apply with respect to amounts earned and vested after 31 December 2004. On 10 April 2007, the Internal Revenue Service (IRS) issued final regulations under the Code that will generally become effective as of 1 January 2008. The final regulations address some issues impacting fund managers with respect to their non-qualified deferred compensation plans while leaving many to be resolved in future guidance. The following summarises these issues:

Assuaging Investor Fears Through Better Risk Management Practices

October 2007 | Quality Risk Management & Operations (QRMO) Limited


Over the past five years of relatively benign markets, it seems Asian hedge funds have been lulled into a false sense of security where the perceived need to have risk management practices on par with global standards is alarmingly low. However, the current credit crisis is bound to change this precarious perception. As the finance industry continues to cope with the widespread fallout from the US subprime mortgage debacle, investors – especially large institutional investors – are becoming increasingly concerned about their fiduciaries having proper risk management infrastructures in place, and rightly so.

Mixing Investment Adviser and Brokerage Services

October 2007 | Hannah Terhune, Esquire, Capital Management Services Group


Trendy money managers and brokers take on the role of chief cook and bottle washer when they opt to be all things to all clients. In the context of this article, we are interested in those situations when they opt to be their client’s broker (or introducing broker) and investment adviser (either to a fund or private client). By becoming a broker, the money manager can significantly increase his bottom line as he is now entitled to sales commissions, third-party selling fees and in some cases increased access to margin (a key point if the manager runs a hedge fund or a proprietary trading firm).

Hedge Fund Performance Commentary

September 2007 | Eurekahedge


The composite Eurekahedge Hedge Fund Index fell 1.8% for the month of August, shedding some of its gains made earlier during the year and bringing year-to-date returns to a still healthy 7.9%. The decline during the first half of the month was almost across the board (most strategy allocations and all regional allocations finished the month negative), given heightened credit concerns, market volatility and risk aversion. However, central bank intervention mid-month somewhat stemmed the sharp declines earlier in the month, stabilising markets towards month-end.

FAS 157: FASB’s Statement on Fair Value Measurements and How It Will Affect Hedge Funds

September 2007 | Michael C. Patanella, Grant Thornton


In 2006, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards No.157, Fair Value Measurements (FAS 157), which was designed to respond to investors’ requests for expanded information about the extent to which entities, including hedge funds (funds), measure investments at fair value, the information used to measure fair value and the effect of fair value measurements on related income and performance.

Hedge Funds Ride Greater China Wave

September 2007 | Hung Tran, FINalternatives


Hedge funds investing in the Greater China region are still reaping the benefits of the long China story and new funds are entering the market in droves. Sources say that the number of existing hedge funds has doubled in the region with total assets under management increasing by more than 100% in the past few years.

Challenges in Administration Faced by Asian Hedge Fund Managers

September 2007 | Christopher Kundro, Lacrosse Global Fund Services


Historically, hedge fund managers in Asia have had few choices when it comes to hedge fund administration and outsourcing. This has resulted in complaints from many hedge funds when it comes to fees and, in particular, capacity to launch new funds. However, while capacity issues have hampered the growth of the Asian hedge fund market, the limited capabilities and offerings of local administrators have impacted the market even more by preventing, or at least slowing, the introduction of new strategies. These limitations have limited the ability of local, Asian based, fund managers to offer their products to foreign investors as well.

Hedge Fund Performance Commentary

August 2007 | Eurekahedge


The Eurekahedge Hedge Fund Index advanced a healthy 1.3%1 during July, even as weakness in the credit markets lowered risk appetites and triggered sharp sell-offs in equities and high-yielding currencies towards the month’s close. The ensuing flight to safe-haven assets, coupled with tame US inflation data, spurred rallies in bond prices and widened credit spreads; the MSCI World Equity Index was down 2.2% for the month, while the Citi World Government Bond Index rose 3% over the same period.

2007 Overview: Key Trends in European Hedge Funds

August 2007 | Eurekahedge


The 2007/2008 edition of the Eurekahedge European Hedge Fund Directory contains information on 2,176 Europe-centric funds, an investment space currently valued at US$448 billion. Contrasted with an industry size of US$20 billion at the end of 2000, this represents an impressive compounded annual growth rate of 62% over the past six-and-a-half years. We estimate industry assets to reach US$494 billion by end-2007, managed by nearly 2,200 funds. The following graph charts the growth of the industry over the past decade, together with forecasts for 2007.

MiFID: Opportunity or Burden?

August 2007 | Russell Thornton, Fidessa


As the MiFID deadline approaches, the clouds of confusion that once surrounded it have largely cleared. What has emerged is a directive whose primary focus is on best execution as a means of protecting the investor. Many would therefore be forgiven for thinking that MiFID will be, at most, a minor ripple in a hedge fund’s operational pond but this would be to underestimate its impact on both the dealing processes within hedge funds, and the technology that is used to support them.

Consultation Paper No 50 – Proposed Hedge Fund Code of Practice

August 2007 | Dubai Financial Services Authority (DFSA)


When the Collective Investment Law 2006 and the Collective Investment Rules (ie the CIF regime) came into effect in April 2006, the DFSA indicated that it expects operators of hedge funds to have proper regard to guidance and best practice standards issued by the DFSA and leading industry bodies. The DFSA also announced that it will develop a code of practice for hedge funds in consultation with the industry after the CIF regime has been in operation for a year. This Consultation Paper seeks public comment on the proposed Code of Practice (the Code) for operating hedge funds in the DIFC.

Brokers Adapt to Generate Trading Ideas for Hedge Funds

August 2007 | Simon Osborne, Asian Investor


Six years ago, nobody had even thought of inventing a research function that gave trading ideas to hedge funds. Since then, with hedge funds providing ever greater commissions, brokerages have cottoned on to the idea of having research analysts who think up inspired deal ideas for hedgies. The trade recommendations began as tweaking long-only ideas, which customarily model earnings growth leading to price/earnings ratio re-ratings, which spawned recommendations – mostly advising a straight ‘buy’.

Event-driven Hedge Funds: How Much Alpha Do They Deliver?

August 2007 | Laurent Favre, AlternativeSoft


In this article, we computed the average alpha of 190 event-driven hedge funds. We found that the average annualised alpha per event-driven hedge fund is 7.3% and the average annualised alternative beta premium per event-driven hedge fund is 7.3%, as well. This means, on average, the alpha and alternative beta for event-driven hedge funds are the same.

Hedge Fund Performance Commentary

July 2007 | Eurekahedge


The composite Eurekahedge Hedge Fund Index advanced 1.7%1 for June, bringing returns for the first half of 2007 to a robust 9%. Despite choppy markets, the month saw hedge funds turning in healthy gains almost across the board, as inflationary pressures and continued weakness in the sub-prime mortgage market drove volatility up. One of the major market events during the month concerned losses at two Bear Stearns hedge funds in the high-yield space. These and other concerns about high yields triggered reversals in the US and European equity and bond markets. Emerging market, and more specifically, Asian equities, on the other hand, proved more resilient. These are broadly reflected in the performance of regional hedge fund mandates as seen in the graph below.

Key Trends in Islamic Funds

July 2007 | Rajeev Baddepudi, Bernardo Vizcaino, Eurekahedge


The Eurekahedge Islamic fund database has grown considerably from its launch last year to now encompass information on more than 458 Shariah-compliant funds (representing a 95% coverage of the market). Our analysis focuses on factual data, allowing it to be comprehensive as well as reliable. The Islamic fund platform encompasses funds from across all asset classes (equity, fixed income, real estate, private equity, etc) and our estimate of the total universe stands at approximately 480 funds, with 500 a feasible industry milestone by year end.

Evolution of the Secondary Market for Hedge Funds

July 2007 | Jared Herman, Hedgebay


What began as a means to assist institutional investors in buying and selling stakes in highly sought-after hedge funds has evolved into a global OTC market where hedge funds and other alternative assets, like private equity, are traded on the secondary market in order to dramatically improve investor liquidity, which has notably deteriorated with the proliferation of longer lock-ups and the extreme demand for high-quality hedge fund returns.

Taxation of Hedge Fund Managers - The Changing Global Tax Environment

July 2007 | PricewaterhouseCoopers


What began as a means to assist institutional investors in buying and selling stakes in highly sought-after hedge funds has evolved into a global OTC market where hedge funds and other alternative assets, like private equity, are traded on the secondary market in order to dramatically improve investor liquidity, which has notably deteriorated with the proliferation of longer lock-ups and the extreme demand for high-quality hedge fund returns.

Hedge Funds, Crime and Regulation American-Style

July 2007 | Simon Osborne, Asian Investor


Talk about ‘give a dog a bad name’. Anyone who gives their hedge fund a moniker like “High-grade structured credit strategies fund” or “High-grade structured credit strategies enhanced leverage fund” is asking for trouble, and trouble is what Bear Stearns, the manager of these products, may get. Politicians in the US are riding their hobbyhorses in the wake of fallout from sub-prime mortgages and their role in CDOs, which ended up wreaking havoc in Bear hedge fund portfolios, ultimately leading to the Wall Street firm bailing out one of them.

Hedge Fund Performance Commentary

June 2007 | Rajeev Baddepudi, Eurekahedge


May spelled yet another good month for most hedge fund strategies, as the composite Eurekahedge Hedge Fund Index returned a solid 2.5% on the back of soaring equities, abundant liquidity in the markets, a still-buoyant M&A landscape, and positive economic and corporate earnings data.

Shareholder Activism

June 2007 | Corbin Capital Partners


Over the past several years, so-called “shareholder activist” strategies have achieved remarkable prominence in the hedge fund industry. Although the practice of combining buy-side investment management with the promotion of shareholder-friendly corporate change is many decades old, activism’s emergence as a widespread dedicated hedge fund strategy is of more recent vintage. Given our interest in the topic, combined with requests from our clients and friends for opinions on this subject, we felt it appropriate to contribute something to the topic of shareholder activism: Our first investment with a manager who would today be called an activist was in the mid-1990s, and, more recently, we have included a dedicated activist investment book in one of our products.

Benchmarking Hedge Fund Distribution Fees for Transfer Pricing Purposes

June 2007 | PricewaterhouseCoopers


The number of hedge funds has seen exponential growth over the last decade. As the market begins to mature, the largest fund managers have become increasingly global, setting up overseas offices in search of new market opportunities which in turn have allowed them to trade in local time zones, research investments in local markets, utilise local knowledge and raise capital from local investors.

Hedge Funds Yet to Pass Stress Test

June 2007 | David Uren, The Australian


Complex hedge fund products may not be able to withstand an increase in market volatility, posing a threat to investors and financial market stability. An OECD report on hedge funds says they provide a valuable role in world asset markets by providing liquidity for mispriced assets. However, it says their fastest-growing line – "structured products" – have not been adequately stress-tested.

Hedge Funds Muscle in on Private Equity Deals

June 2007 | Snigdha Sengupta, Rana Rosen, Livemint


Gridstone Research, an equity research start-up in Mumbai, had secured venture capital funding from three investors last March. The investors included Charles River Ventures, Helion Venture Partners and finally Maverick Capital, a US$10 billion (Rs41,000 crore) American hedge fund.

Hedge Fund Performance Commentary

May 2007 | Rajeev Baddepudi, Eurekahedge


The composite Eurekahedge Hedge Fund Index is up a robust 2.4% for the month of April, bringing the year-to-date returns to 5%. Following the market correction of late-February/early-March, financial markets globally continued their strong recovery, with the notable exception of Japanese equities, which were largely flat at month-end.

Investing in Hedge Funds: A Long-term Proposition?

May 2007 | Rajeev Baddepudi, Eurekahedge


The current size of global hedge fund assets is estimated at US$1.5 trillion, representing a compound annual growth rate in assets of about 40% over the past five years. As the hedge fund industry takes on a more mainstream aspect and caters to a broader investor base, the question of redemption frequency (the length of time that needs to elapse before an investor into a fund can redeem their assets) and its relationship to fund performance is becoming increasingly relevant.

Why 'Syndicated Investing' is the New Big Thing

May 2007 | Steven Irvine, FinanceAsia


In the old days banks lent money and out of this grew a business called syndicated lending. Today there’s a new phenomenon. Investment banks are now investing in Asian companies – side by side with hedge funds – in what might be termed ‘syndicated investing’.

Offshore Fund Taxation

May 2007 | Hannah Terhune, Esquire, Capital Management Services Group


The number of offshore hedge funds has increased due to the ability of these funds to operate outside the scope of government regulation and disclosure requirements. Hedge funds are set up as offshore or onshore funds to allow for different groups of investors. US-based hedge fund managers who have significant potential investors outside the United States and/or US tax-exempt investors typically create offshore funds. Many hedge fund managers use offshore hedge funds to provide privacy to investors. In those cases where complete investor confidentiality and privacy are necessary, an offshore fund should not accept US investors and the fund manager should not be based in the United States.

Hedge Fund Performance Commentary

April 2007 | Rajeev Baddepudi, Eurekahedge


The Eurekahedge Hedge Fund Index was up a modest 0.6% for the month of March. Market movements during the first half of March were very much a continuation of those towards end-February, with heightened volatility and investor uncertainty. The markets, however, stabilised mid-month, as valuations became attractive once again and as the FOMC meeting announced that the target federal funds rate would remain unchanged (with a later clarification that inflationary risks remain its main focus). For instance, the MSCI World (Equity) Index shed nearly 3% in the month’s first three days of trading, but eventually closed the month up 1.6%.

Attrition in the Hedge Fund Space

April 2007 | Rajeev Baddepudi, Eurekahedge


The global hedge fund industry is currently valued at slightly over US$1.5 trillion, growing five-fold in as many years. With increasing interest from institutional investors such as pension and endowment funds, and a deepening value chain (the emergence of data vendors, fund incubators and third-party marketers catering to hedge fund investor needs), the industry has taken on a more mainstream aspect. This has boosted the pace of new launch activity, and with it, the rate of attrition in the industry.

Hedge Fund Replication and Industry Initiatives: Clones or Hybrid Products?

April 2007 | Walter Géhin, EDHEC Risk and Asset Management Research Centre


Will the hedge fund industry imitate the mutual fund industry by following the path of passive investing? This question is at present one of the hottest in the alternative universe, where the ability to replicate hedge funds is being extensively debated. Whatever the term used – clone, synthetic fund or replication index – this new product is presented as a third generation of products in the passive representation of hedge funds, after non-investable indices and investable indices.

The China Show: How Will it End?

April 2007 | Simon Osborne, Asian Investor


Hedge fund managers contemplate the effects of China’s nouveau riche consumer, and where income disparities might ultimately lead the People’s Republic. With first-quarter GDP growth estimated to be possibly as high as 12-15%, China continues to experience a spectacular secular phase of growth comparable to that of Japan in the 1970s and 1980s. Hedge fund managers are considering where China’s markets go from here.

The Mystery of the ‘December Spike’

April 2007 | Vikas Agarwal, Naveen D Daniel, Narayan Y Naik


Hedge funds are compensated by incentive fees based on annual performance exceeding pre-specified thresholds1. Additionally, better annual performance results in more investor inflows into the fund (Agarwal, Daniel, and Naik, 2004). Hence, there exist strong incentives for managers to improve performance as the year comes to a close. Using a comprehensive database of hedge funds, we for the first time show that December returns of hedge funds are significantly higher than their average returns from January to November (see Figure 1, Panel A). We refer to this as the December spike.

The Seven Habits of Highly Effective Hedge Funds

April 2007 | David Aldrich and Marina Lewin, The Bank of New York


Over the next five years, a large pool of institutional money will pour into hedge funds. Those funds with highest operational standards will catch the wave. For several years, explosive growth has been the norm in the hedge fund industry. While that growth is not likely to abate any time soon, the source of new capital is shifting rapidly. Institutions - particularly pension funds - will become the primary source of capital for hedge funds. Their demands will change the industry.

Hedge Fund Performance Commentary

March 2007 | Rajeev Baddepudi, Eurekahedge


The Eurekahedge Hedge Fund Index ended February up 0.6%, doing reasonably well despite choppy markets towards the month’s close, as worldwide equity markets witnessed sharp drops of between 4% and 9%. Some of the key drivers of this decline were negative comments emanating from (former Federal Reserve Chairman) Alan Greenspan, continuing geo-political tensions in the Middle East, the Chinese government’s attempt to slow growth by making it more difficult to purchase equities on margin, and a general perception that global markets have been overdue for a correction.

2007 Overview: Key Trends in Asian Hedge Funds

March 2007 | Rajeev Baddepudi, Eurekahedge


The 2007 edition of the Eurekahedge Asia and Japan Hedge Fund Directory contains information on over 1,150 Asian hedge funds. Based on this and related information, we currently estimate the total size of the Asian hedge fund universe at US$132 billion as of end-2006, up 30% from our end-2005 estimate of US$101 billion. Judging by this, the performance of the Eurekahedge Asian Hedge Fund Index (+16% for 2006 and +12% annualised), and the general growth of the industry over the last decade (see Figure 1), the Asian hedge fund space continues to be on an exponential growth curve on both counts – number of funds and size of assets.

Emerging Hedge Fund Manager Sentiment Survey

March 2007 | VanthedgePoint Group


VanthedgePoint Group, Inc, an integrated financial services and technology firm catering to small hedge funds, conducted its second annual Emerging Hedge Fund Manager Sentiment Survey in January 2007. The survey was sent electronically to over 1,270 hedge fund managers. The email list was compiled through a number of proprietary sources, and included potential and existing clients. The survey consisted of 15 multiple choice questions and the company received a total of 189 responses.

Hedge Fund Performance Commentary

February 2007 | Eurekahedge


Hedge funds got off to a strong start in 2007 on the back of a healthy run-up to the end of 2006, with January returns of the composite Eurekahedge Hedge Fund Index at 1.2%. Performance was broad-based as well, with most regional and strategic mandates returning close to or upwards of 1%, as profits came from across several asset class markets.

Institutional Demand for Hedge Funds: A Global Perspective

February 2007 | The Bank of New York


This 2006 survey was conducted through more than 100 in-depth interviews with institutional investors, investment consultants, hedge funds, funds of hedge funds and industry experts worldwide. It follows the similarly successful survey conducted in 2004, both undertaken in conjunction with Casey, Quirk & Associates.

Why Due Diligence is More Valued than Reputation

February 2007 | John Butcher, HFMWeek


The hedge fund industry has always been about reputation. It began with big names, larger-than-life characters, making outsized returns with innovative and sometimes risky strategies. Top performers have been referred to as ‘star managers’, and successful management firms have taken on almost mythical status.

ICMA Centre Student Commended in Eurekahedge Prize

February 2007 | Eurekahedge, ICMA Centre


ICMA Centre student, Hong Hung Quach, who studied the MSc International Securities, Investment and Banking has received the commendation of runner-up for the Eurekahedge prize for the best paper on hedge funds, after working on a major project based on Eurekahedge data for his MSc.

Hedge Fund Performance Commentary

January 2007 | Rajeev Baddepudi, Eurekahedge


Hedge funds had yet another strong month in December (+1.8%) and closed the year 2006 up a healthy 13.4%. Returns during the month were broad-based as well, with most regional and strategic mandates returning 2% or more. This review attempts to examine and enumerate some of the key factors responsible for these strong returns, while also looking ahead at 2007’s investment horizon as it applies to hedge fund returns. This review is organised into two broad sections focusing on the style-driven and region-driven aspects of hedge fund performance during December 2006 as well as the year as a whole, and a third section focusing on the outlook for 2007.

Asian Regulatory Roundup

January 2007 | White & Case Global Investment Funds Group


The following article is a reproduction of a round table discussion by the global partners from White and Case's hedge fund services practice. The partners discuss recent changes in global regulations and their ramifications for Asian managers.

Alpha, New Money Flows and Capacity Constraints

January 2007 | Narayan Naik, Professor of Finance and Director of the BNP Paribas Hedge Fund Centre London Business School


A November 2006 article in the Economist and a report by Merrill Lynch in October both referred to research by myself and colleagues on the nature of hedge fund returns and the resulting flows into different types of fund. They drew in particular on a working paper by Fung, Hsieh, Naik and Ramadorai (available for download on the BNP Paribas Hedge Fund Centre’s website, www.london.edu/hedgefunds.html). The paper is entitled “Hedge Funds: Performance, Risk, and Capital Formation”. In this short article I want to describe briefly the questions we were asking, some of the results we obtained, and to speculate on how, if we are right, the hedge fund industry might evolve.

Hedge Fund Performance Commentary

December 2006 | Rajeev Baddepudi, Eurekahedge


The composite Eurekahedge Hedge Fund Index returned an impressive 2.6% in Nov (and 11.5% for the year to date) with equally promising, if not better, returns among hedge fund strategies and regional mandates across the board. The key market event during the month was the declining US dollar (USD). During the month, the USD broke out of recent ranges and reached multi-year lows against a range of currencies, owing to a host of reasons. Given the slowdown in US economic growth, investors expecting the Federal Reserve to begin loosening its monetary policy in 2007, and the attendant benign inflationary outlook, the markets imply a narrowing of interest rate differentials and the US advantage of positive interest rate differentials continues to weaken.

2006 Overview: Key Trends in Latin American Hedge Funds

December 2006 | Rajeev Baddepudi, Eurekahedge


The hedge fund industry in Latin America has witnessed tremendous growth over the last few years in an environment of favourable economic conditions and markets that are increasingly resilient to turbulence in the global economy; industry assets grew at a compounded annual rate of 50% in the last two years alone, while turning in some of the best returns among hedge funds globally (the Eurekahedge Latin American Hedge Fund Index has almost tripled in value since the turn of the century).

Managing Fat Tail Risk in Quant Manager Selection

December 2006 | Platypus Capital Management


Platypus Capital Management is a systematic quantitative money management firm. Our people have worked on both sides of the quant fence: as managers and also as hedge fund allocators. The knowledge we have gained in one incarnation has clearly informed how we go about our tasks in the other. We therefore have some well-formed views as to the sorts of factors which are likely to give high or low levels of confidence in any particular quantitative investment program. We would like to share some of our experiences with you and invite your comments. It is our view that the chances of a quant programme failing are very high unless certain key steps are taken.

Hedge Fund Misconduct and Due Diligence: Protecting Yourself

December 2006 | Harry Davis, Sahar Shirazi, Schulte Roth and Zabel


In the last five years, there has been a spate of high-profile enforcement actions against hedge funds by the US Securities and Exchange Commission (“SEC” or “Commission”) as well as other federal and state regulators and even prosecutors. Indeed, the SEC cited hedge fund fraud as a justification for requiring hedge fund advisors to register with the Commission.

Hedge Fund Performance Commentary

November 2006 | Rajeev Baddepudi, Eurekahedge


The composite Eurekahedge Hedge Fund Index returned a robust 1.81% for the month of October and 8.5% for the year to date. The month’s performance was driven by a strong rally in equities on the back of a healthy earnings season in Q3 (the MSCI World Index returned 3.7% for the month), and to a lesser extent, by a rally in metals (owing to constrained supply conditions). On the other hand, some of the economic data emanating from the US for Q3 2006 – multi-year lows in the growth in residential housing constructions (-17%) and GDP growth estimates (1.6%) – triggered reversals in global fixed income and currency markets; bond prices rallied and the US dollar weakened on expectations of lower future US interest rates.

Equity Market Neutral Hedge Fund Return Drivers

November 2006 | D. Stephen Foerster, Ivey Business School, University of Western Ontario


In this study, I focus on trying to better understand what drives the returns of the "classic" hedge fund style: equity market neutral strategies. If such strategies are able to exploit market inefficiencies, then these strategies should provide significant outperformance after adjusting for risk. Measures of market beta should not be significantly different from zero. Similarly, any other betas relative to various "exposures" or factors should not be significantly different from zero. In order to test these propositions, one needs to identify various risk factors beyond the traditional market that might explain returns.

Portable Alpha – The Most-Talked-About Application of ‘Alpha’ is Becoming Reality

November 2006 | Todd M. Brussel, The Royal Bank of Scotland Group


Structured products and portable alpha are concepts that have been around for many years, but their synthesis has recently emerged as an upward-trending investment phenomenon, particularly among pension plans. When structured properly with due consideration given to risk tolerances, a structured portable alpha product employing a portfolio of hedge funds as the alpha source can be an attractive investment tool.

First Prize for ICMA Student Research Paper

November 2006 | Eurekahedge, ICMA Centre


A student at the University of Reading’s ICMA Centre has won a prestigious investment banking prize. Click here to read the research paper “Is there an optimal mix between alpha and beta benefits in hedge fund returns?" Diana Calin, an MSc student studying International Securities, Investment and Banking at the ICMA Centre, University of Reading, has won the Eurekahedge Prize for the best paper on hedge funds after working on a major project which formed the bulk of her MSc.

Hedge Fund Performance Commentary

October 2006 | Rajeev Baddepudi, Eurekahedge


The Eurekahedge Hedge Fund Index closed the month of September up 6 basis points (and 6.3% year to date) amidst a moderately slowing US economy, a sharp drop in energy and commodity prices, and continued strength in equities and treasuries as the markets continued to conjecture that the Federal Reserve is done raising rates. There was also a major hedge-fund-industry-specific market event during the month – the liquidation of the significant portfolio of Amaranth Advisors, which was hurt by plummeting natural gas prices – and this played catalyst to a spate of liquidity-driven selling that proved beneficial to a few hedge fund strategies such as arbitrage and distressed debt, especially among North American managers.

2006 Over: Key Trends in Asian Hedge Funds

October 2006 | Rajeev Baddepudi, Eurekahedge


The 2006 edition of the Eurekahedge Asian Hedge Fund Directory contains information on close to 950 hedge funds, investing and/or located in Asia, an investment space that stands at just over US$128 billion as of the end of July 2006. Although the pace of growth of the industry has lessened (we expect the industry to grow 25% by number and 40% by assets, in 2006) compared with the past two years (for instance, the number of hedge funds in Asia grew by 35% in 2004 and 30% in 2005), in absolute terms, the growth is still substantial, with more than US$30 billion in net assets estimated to flow into Asian hedge funds in 2006.

2006 Overview: Key Trends in Islamic Funds

October 2006 | Rajeev Baddepudi, Bernardo Vizcaino, Eurekahedge


Islamic investments have garnered interest over the years and have gained momentum not only from established participants but also from a variety of new entrants. While some outsiders would care to refer it as a subset of the socially responsible industry, the informed observer will note that the industry has taken a life of its own and is poised to develop further.

Hedge Fund Operational Risk: Meeting the Demand for Higher Transparency and Best Practice

October 2006 | The Bank of New York


We are witnessing a dramatic evolution of investment behaviour in alternative investments, with both a phenomenal increase in the rate of flow of assets from institutional investors and a rapid maturation of the industry’s infrastructure. These are exciting times for hedge fund investment returns which have coincided with the changing composition of the investor pool. This is having a direct impact on the habits of investors in the more prosaic area of operational due diligence.

Emerging Markets – To Hedge or Not to Hedge

October 2006 | Peter Douglas, GFIA Pte Ltd


Investing in emerging market hedge funds is a completely different activity from investing in emerging markets. Investing, unhedged, in emerging market securities, is a long-term bet on the growth of the corporate sector of the developing world, and, at points in the cycle, a shorter-term bet on the risk appetite of global investors. The following figure shows the roller-coaster ride that a directional emerging market investor would have experienced over the past ten years.

Will Your Insurance Protect You in a Tougher Regulatory Environment?

October 2006 | Brian Horwell, Miller Insurance Services Limited


Recent high profile cases point to the probability that tougher regulatory constraints will be imposed on hedge funds in the not too distant future. These cases include the fine imposed on GLG and Philip Jabre, by the Financial Services Authority, the Japanese regulator's action against Yoshiaki Murakami’s alleged insider trading and the requirement for hedge funds to register with the Securities and Exchange Commission (SEC), albeit on hold at present.

Hedge Fund Performance Commentary

September 2006 | Rajeev Baddepudi, Eurekahedge


Despite some volatility on account of the Lebanon crisis, the hurricane forecasts, the London terror threat, and weak US economic data, global financial markets continued to recover in August on the back of progressively better (or rather less negative) returns seen over the previous three months. The Eurekahedge Hedge Fund Index returned 0.8% for the month of August and 6.4% for the year to August. The month saw profitable opportunities in most asset classes, as global inflation fears subsided and the markets began to anticipate the end of the Federal Reserve’s monetary tightening cycle. The Fed’s pause came amid signs of an economic slowdown in the US and forecasts that inflationary pressures will ease gradually.

2006 Overview: Key Trends in North American Hedge Funds

September 2006 | Rajeev Baddepudi, Eurekahedge


Based on the information contained in the 2006 edition of the Eurekahedge North American Hedge Fund Directory and other related information, we currently estimate the total size of the North American hedge fund space at over 4,000 funds managing close to US$840 billion in assets. Operating in the world’s most advanced financial markets, these funds account for over three-fifths of the total assets parked in hedge funds globally. Historically too, the North American hedge fund universe has been sizeable (Figure 1); to put it in context, their size in 1997 is comparable to the current size of the Asian hedge fund space.

Passive Versus Active Investment in Hedge Funds

September 2006 | Sandra L. Manzke, MAXAM Capital Management


In 1972, the ‘Reserve Fund’ was established as the first money market fund, enabling investors to invest cash balances in an efficient and effective manner. Fidelity and Scudder, Stevens and Clark were also putting the final touches on their own funds and quickly revolutionised the mutual fund world. Today, there are more than 1,300 money funds in the United States alone, and money market funds are offered in all the major currencies throughout the world.

Hedge Fund Performance Commentary

August 2006 | Rajeev Baddepudi, Eurekahedge


After yet another month of stagflationary pressures in July – inflationary concerns coupled with fears over a possible slowdown in the economy – the Eurekahedge Hedge Fund Index fell (-0.4%) for the third consecutive month (albeit at a progressively flatter rate). Global equities were characterised by volatility similar to June’s market movements – falling during the first half of the month and recovering in the latter half – with the net effect of closing the month nearly flat. The MSCI World Equity Index was up 0.6% for the month, while the S&P 500 was up 0.5%. Commodities and currencies also saw similar sharp reversals mid-month. Funds also suffered from the rebound in international bond markets, as investors anticipated a pause in the cycle of rate hikes in European and American short-term interest rates.

Fund Interview with Brad Cole, President and CEO of Cole Asset Management

August 2006 | Eurekahedge


Cole Asset Management (CAM) was formed in 2004 as an investment advisor, and its first proprietary product, Tellus Natural Resources Fund, a fund of funds dedicated to the commodities and natural resources sector, was launched in February 2005. Brad Cole has more than 20 years of industry experience, including ten years on the floor of the CME trading futures and options, then as part of a successful Chicago-based CTA. Developing and dissecting trading approaches has been at the heart of Cole’s investment career since 1980. Rian Akey, COO, has been working with CAM for more than seven years, primarily in a research and due diligence capacity.

The Risk-averse Investment Tool

August 2006 | Shamillia Sivathambu, HFMWeek


With between 15% and 20% of all hedge fund assets coming from structured product providers, the alternative investment market is fast catching on to the benefits of attracting such institutional clients. Up until now, most of these assets have been directed at funds of hedge funds (FoHFs), but single-manager funds are beginning to jump on the bandwagon too. Yet despite the allure of ‘sticky’ money, some hedge funds remain dubious of such clients.

Performance and Advertising – A Practical Guide for Hedge Funds in the Post Registration Era

August 2006 | Jay B. Gould and Michael G. Wu, Pillsbury Winthrop Shaw Pittman LLP


On 23 June 2006, the US Court of Appeals for the D.C. Circuit vacated the rule, which required hedge fund managers to register with the Securities and Exchange Commission (SEC). As a result, hedge fund managers are no longer required to register with the SEC, nor are they subject to SEC compliance inspections and examinations. However, the court’s ruling does not affect the SEC’s authority to investigate and bring enforcement actions against hedge fund managers, regardless of whether they are registered, for violating the anti-fraud provisions of the Investment Advisers Act of 1940 (the “Advisers Act”).

Currencies can be a Distinct Source of Alpha

August 2006 | Dr Joe Zhou, James Shang and Christina Mu, Ortus Capital Management


Despite its enormous size, the market for major currencies is relatively young. The final breakdown of the Bretton Woods system in 1973 marked the end of the fixed exchange rate system and ushered in a new era of foreign exchange (forex) trading. After the forced exit of the British Pound from the European Exchange Rate Mechanism in 1992, the forex market basically took on the shape it is today. Nowadays, major central banks target the short-term interest rate as the primary monetary policy tool.

Drafting Hedge Fund Performance Allocations

August 2006 | Hannah Terhune, Esquire, Capital Management Services Group


Anyone who compares a hedge fund’s offering documents with those of a mutual fund cannot but be struck by the enormous difference in rewards for the managers of hedge funds vis-à-vis that of mutual fund managers. Because mutual funds (and closed-end funds) may offer their securities to the “great investing public,” their managers are greatly restricted in their rewards – the fees for investment advisors are limited to a percentage of assets under management (AUM).

Hedge Funds – Are They Investment Banks of the Future?

August 2006 | Debbie Payne, Robert Mellor, PricewaterhouseCoopers, London


Convergence of activity between hedge funds and investment banks poses a challenge for tax authorities. The authorities are seeking to prevent investment bank-type activities from moving outside the tax net without discouraging the asset management industry.

Hedge Fund Performance Commentary

July 2006 | Rajeev Baddepudi, Eurekahedge


The market environment in June was not much different from that in May – inflationary concerns and heightened interest rate expectations continued to dominate market events. This translated into a difficult trading environment across most asset classes – declining prices in the first half of the month and a rebound in the latter half. Consequently, most global indices had a flat to marginally positive/negative month in June, reflected in the performance of the composite Eurekahedge Hedge Fund Index (-0.5%)1, the directional Eurekahedge Macro Hedge Fund Index (-0.1%), as also most regional indices (refer graph below).

2006 Overview: Key Trends in European Hedge Funds

July 2006 | Rajeev Baddepudi, Eurekahedge


The Eurekahedge European Hedge Funds database currently contains information on close to 2,200 Europe-based hedge funds, an investment space currently valued at about US$350 billion. From humble beginnings at US$20 billion in the late 1990s, the industry has grown at a staggering annualised rate of 72% since end-2000. We estimate industry assets to reach US$390 billion in value by end-2006 – an increase of US$85 billion from the end-2005 figure. The following graph charts the growth of the industry over the past decade, together with forecasts for 2006.

Eastern Promise

July 2006 | John Butcher, HFMWeek


Judging by the number of conferences and other events focused on them in recent months, the emerging market hot spots for hedge fund investment are China and India. They seem like logical plays - two enormous countries, each with more than a billion people, rapid growth and a fast-rising upper and middle class. There should be, and indeed are, a wealth of opportunities to be taken in these growing economic powers - both in terms of investment opportunities and potential new hedge fund investors. But there are also a number of barriers to jump and risks to assess before doing so. This has become particularly evident this week, as the Indian exchange fell 4.2% on Monday amid a worldwide downturn.

Is the "Hedge Fund Registration Rule" Dead? Where to From Here for Asian-based Registered Advisers - The Implications of Goldstein vs Securities and Exchange Commission

July 2006 | Effie Vasilopoulos, Scott Peterman, Sidley Austin


In December 2004, by a contentious 3-2 vote, the SEC adopted Rule 203(b)(3)-2 (the “Hedge Fund Rule”) under the Investment Advisers Act of 1940. The Hedge Fund Rule requires investment advisers to count as clients the investors in a “private fund” (as defined in the United States Investment Advisers Act of 1940, as amended, the “Advisers Act”). Hedge fund advisers previously relied on the “private adviser exemption” from registration provided in Section 203(b)(2) of the Advisers Act, which provides that an adviser which has had fewer than 15 clients during the course of the preceding 12 months and that neither holds itself out generally to the public as an investment adviser nor acts as an investment adviser to any registered investment company is not required to register with the SEC.

How Hedge Fund Investors Can Improve Their Alpha Forecasting Ability

July 2006 | Robert Kosowski, INSEAD


Many hedge fund investors are becoming more discerning regarding whether they pay for performance that is the result of alpha or beta exposure to common risk factors. Unfortunately, when it comes to identifying and forecasting alpha, hedge fund investors face a couple of challenges. First, investors need to identify the funds that have skill and did not just generate good performance as a result of luck. This is a serious problem given the large number of funds in existence – according to Hedge Fund Intelligence, there are now over 8,000 hedge funds in existence managing over US$1.5 trillion.

Hedge Fund Performance Commentary

June 2006 | Rajeev Baddepudi, Eurekahedge


The market environment in June was not much different from that in May – inflationary concerns and heightened interest rate expectations continued to dominate market events. This translated into a difficult trading environment across most asset classes – declining prices in the first half of the month and a rebound in the latter half. Consequently, most global indices had a flat to marginally positive/negative month in June, reflected in the performance of the composite Eurekahedge Hedge Fund Index (-0.5%)1, the directional Eurekahedge Macro Hedge Fund Index (-0.1%), as also most regional indices (refer graph below).

Portable Alpha: Is a Hedge Fund Index-based Alpha Overlay the Most Appropriate Solution?

June 2006 | Werner Goricki, Dirk Soehnholz, Marcus Storr, Vincent Weber, Feri Institutional Advisors


“Portable alpha” is a widely discussed concept in Europe as well as in Asia. However, successful implementation has been rare. We will discuss three basic concepts that can be applied to institutional portfolios or investment funds. Hedge funds are identified as the most attractive source of alpha. An alpha overlay (swap) is described as the most efficient way to import alpha into existing portfolios and investment funds. Such a swap can add significant additional return without adding a proportional amount of risk to the portfolio. Single hedge funds will be compared with funds of hedge funds and hedge fund indices regarding their suitability for alpha swaps.

Spain Finalises the Regulation of Hedge Funds

June 2006 | Jesús Mardomingo, Jorge Canta Diaz de Guereñu, Cuatrecasas


With the approval of Circular 1/2006 on 3 May by the Spanish regulator, the CNMV, the regulation on hedge funds has been finalised after prior approval of the Regulation on Collective Investment Institutions passed on 4 November 2005 (hereinafter, both the Regulation and the Circular, the “Regulations”). Once this regulation is approved, Spanish management companies would be able to file for the licence to manage hedge funds, which would be the prior step for the first product to be launched.

The Asian Masters of Hedge Awards 2006

June 2006 | Eurekahedge


Eurekahedge would again like to thank all the people that came and the sponsors that made last Friday evening possible. Over 300 people attended the most glamorous and festive hedge funds party in Asia to celebrate not only the winners, but the Asian hedge fund industry for its dynamism, diversity and phenomenal growth.

Hedge Fund Performance Commentary

May 2006 | Rajeev Baddepudi, Eurekahedge


Hedge fund returns rebounded in March after a flat month in February – the benchmark Eurekahedge Hedge Fund Index1 rose a handsome 2% – and resumed the uptrend seen in the preceding months on the back of rising markets, closing the first quarter of 2006 on a very positive note (+5.5%). The month's performance came amidst favourable markets characterised by high levels of corporate activity, rising equity markets and tightening credit spreads.

Interview with Sunny Xuan Li of Pinpoint Asset Management

May 2006 | Eurekahedge


Pinpoint Asset Management manages the China-dedicated Pinpoint China Fund. The fund was launched in June last year and currently has around US$40 million under management. The total return since inception was 45% net till the end of March 2006.

Implications of SEC Registration on Hedge Fund Managers

May 2006 | Tony Evangelista, PricewaterhouseCoopers, London


If a hedge fund has had, in the preceding 12 months, more than 14 investors that are US residents, the offshore adviser to that hedge fund generally must register with the SEC under SEC Rule 203(b)(3)-2 Registration Under the Advisers Act of Certain Hedge Fund Advisers. With SEC registration comes the inevitable examination where SEC examiners (either alone or jointly with a local regulator) will want access to your policies and procedures, books and records and management personnel to assess compliance with applicable US rules and regulations. A major focus of the examination will centre on conflict management and how an organisation, identifies, monitors and mitigates conflicts of interests inherent in their business.

Hedge Fund Performance Commentary

April 2006 | Rajeev Baddepudi, Eurekahedge


After the robust returns seen in the past few months, markets and investors paused for a breather in February, and this was reflected in the performance of the Eurekahedge Hedge Fund Index (up 0.2%). The key drivers of hedge fund returns during the month were bullish emerging markets, market neutral strategies and special situations.

Tax Compliance Issues Affecting Offshore Funds

April 2006 | Craig Haber, Jonathan Schmeltz, Grant Thornton


While tax administrators play a key role in economies that are progressively becoming more globalised, they also face numerous challenges that come with sectors that are not easy to tax, sophisticated communication technologies and intense tax competition. Below are some answers to questions you might have about hedge funds categorised as foreign corporations.

Hedge Fund Performance Commentary

March 2006 | Rajeev Baddepudi, Eurekahedge


Hedge funds got off to a running start to the year, with the Eurekahedge Hedge Fund Index rising a handsome 3.2% for the month of January. With the exception of Japan, which had to contend with choppy markets intra-month, all the regional indices returned upwards of 3% for the month. Global investors anticipating an end to the Fed tightening cycle in the near term, spurred equity markets across the board onto healthy gains.

A Note on the Reduction of Extreme Risks by Means of Diversification

March 2006 | Harry M. Kat, Helder P. Palaro, Cass Business School, City University


A recent EDHEC study on the use of hedge funds in asset-liability management has concluded that "allocating 20% to hedge funds can reduce a fund's probability of extreme loss by 50%". This conclusion has received quite some attention in the media (see the above quotes for example) and any hedge fund marketers have already eagerly incorporated it in their sales pitch. The question, however, is whether it is indeed such a remarkable finding as many people seem to believe. After all, diversification reduces volatility and lower volatility means less extreme risk. What therefore needs to be shown is that the obtained reduction in extreme risk exceeds what one would normally expect from allocating 20% to a new diversifier.

Hedge Fund Performance Commentary

February 2006 | Rajeev Baddepudi, Eurekahedge


2005 was a very good year for hedge funds all round, as most Eurekahedge regional indices clocked returns upwards of 10% for the year. The benchmark Eurekahedge Hedge Fund Index returned 10% for the year. After a sluggish first quarter and some market turbulence in April and May, most of the global hedge fund universe took off in June and remained buoyant for the rest of the year, particularly so in the emerging markets and Japan. The only exception was the month of October, which witnessed a short-term, end-of-the-year profit-taking.

The Flow of Smart-Money – a Comparative Analysis of Long/Short Equities vs Long-only Absolute Return Funds

February 2006 | Rajeev Baddepudi, Eurekahedge


The Eurekahedge database has now grown to cover over 200 long-only absolute return funds (ARFs) that together represent in excess of US$27 billion in managed assets. Long-only ARFs are a recent addition to the alternative investment landscape and have grown in both size and number only in the past few years. Their increasing popularity among institutional investors is driving more hedge funds – leveraging on their presence and experience in the equity markets – to launch long-only products. Also, over the years, huge capital inflows into hedge funds have brought on an environment of shrinking conventional opportunities, especially on the short side.

India – Is It For Real This Time Round?

February 2006 | Paul Parambi, Kotak Mahindra (UK) Ltd


The BSE Sensex, the benchmark of large-cap Indian stocks, has climbed vertiginously past 8,000, an appreciation of almost 80% from the troughs of 4,505 on 17 May 2004. Foreign Institutional Investors (FIIs) have poured in close to US$17 billion into the Indian equity markets since January 2004, over 44% of the cumulative foreign flows since the markets were opened to foreign investors in 1993. The Indian market is in the grip of a euphoria; often seen in the past 15 years, always holding promise, but seldom failing to disappoint. Therefore it is both natural and fair to question the nature and sustainability of the current Indian opportunity and what it holds for hedge funds.

Replication and Evaluation of Fund of Hedge Funds Returns

February 2006 | Harry M. Kat, Helder P. Palaro, Cass Business School, City University


With the first hedge fund said to be dating back to 1949, hedge funds have been around for quite some time. Academic research into hedge funds, however, only took off towards the end of the 1990s when sufficient data became available. Since then, and inspired by the strong growth of the hedge fund industry worldwide, a respectable number of research papers and articles have provided insight in many different aspects of hedge funds. One question largely remains unanswered though. Do hedge funds provide their investors with superior returns? In other words, do hedge funds provide their investors with returns, which they could not have obtained otherwise?

Hedge Fund Performance Commentary

January 2006 | Rajeev Baddepudi, Eurekahedge


Following on the heels of a month that witnessed a combination of profit-taking and short-term market correction, November saw hedge funds bouncing back into positive territory, with most Eurekahedge regional and strategy indices recording returns upwards of 2%. Investors were visibly buoyed by robust economic data, Japan's positive turn, moderate inflation in the US and the Federal Reserve's apparently diminishing concerns about rising inflation. The benchmark Eurekahedge Hedge Fund Index returned a handsome 2.2% for the month.

Interview with Brook Tellwright, CEO of Ton Poh Capital

January 2006 | Eurekahedge


The Ton Poh Emerging Thailand Fund is managed by Ton Poh Capital, whose CEO is Brook Tellwright and advised by Bangkok-based Hunters Asset Management, whose CEO is Jeep Chatikavanij. Brook was previously an employee of British investment bank, Cazenove & Co. He has 20 years' experience, four of which were in Thailand, in analytical and fund management roles. Jeep was formerly director of institutional broking at Jardine Fleming Thanakom Securities. Jeep has been in the securities industry for 15 years now, and has founded Hunters in 2004.

The Search for Alpha: Investing in Newer Hedge Funds

January 2006 | Sam Kirschner, Matthew Hoffman, Ron Panzier, Mayer & Hoffman Capital Advisors


A slew of studies have concluded that newer hedge funds have outperformed their more seasoned peers. Table 1 summarises three of these studies (Jen, Heasman & Boyatt, 2001; Tremont/Tass, 2000; HFR, 2000) with adjustments for survivor bias ranging from 2.9% in year one to 0.9% in year six of existence. The left side of Table 1 shows a 700-basis point advantage between funds in their first year versus year seven. Note that volatility as measured by annualised standard deviation is relatively unchanged regardless of the fund's year in business.

How Choosing the Right Marketplace Can Help Hedge Funds Optimise Their Foreign Exchange Performance

January 2006 | Mark Warms, Fxall


More money is flowing into the foreign exchange markets than ever before. The latest triennial survey by the Bank for International Settlements (BIS) released during 2005 revealed that daily foreign exchange turnover had soared to US$1.9 trillion in 2004, up from US$1.6 trillion in 2001. This growth is being propelled by trading from non-bank financial institutions – pension funds, asset managers and, perhaps most strikingly, hedge funds.

Summary of Essential Provisions of CNMV Circular X/2005

January 2006 | AIMA and Jesus Mardomingo Cozas, Cuatrecasas


This is a summary of essential provisions of Circular X/2005 issued by the Spanish regulator, the CNMV, on 3 November 2005. (NOTE: this summary for AIMA members is based on information kindly provided by AIMA members, the law firm of Cuatrecasas, and an English translation of the Circular provided by another law firm.)

Hedge Fund Performance Commentary

December 2005 | Rajeev Baddepudi, Eurekahedge


October turned out to be a poor month for hedge funds across the board. In a marked departure from the positive to spectacular returns seen in the last five months, almost all the Eurekahedge regional indices took a southward turn. The exceptions were Japanese hedge funds (the Eurekahedge Japan Hedge Fund Index was up an impressive 1.7% for the month), and to a much lesser degree, onshore Latin American hedge funds (whose corresponding index was up 0.6% during the same period). The North American and European indices, on the other hand, registered negative returns of 1.3% and 1.8% respectively.

2005 Overview: Key Trends in European Hedge Funds

December 2005 | Rajeev Baddepudi, Eurekahedge


The number of European hedge funds has grown rapidly over the last ten years, and the European hedge fund industry has witnessed a healthy growth both in terms of assets under management and the number of funds. By the end of 2005, the total number of European hedge funds is expected to hit 1,650 with total assets amounting to about US$350 billion (approximately 30% of the global hedge fund industry), more than double that of 2003.

Interview with Partners of Arcus Investment Ltd

December 2005 | Eurekahedge


The Arcus team, consisting of Robert Macrae, Peter Tasker and Mark Pearson, discusses its new long fund, Arcus Japan Fund (AJF). AJF has returned 15% since inception in March 2005, with an annualised return of 24% and annualised volatility of 14%. The fund currently has US$90 million in assets.

Sopa Piranha – Near to the Madding Crowd

December 2005 | Mari Kooi, Wolf International


My tenth issue of Piranha Soup continues the theme of the ninth version. It was focused on rough times in fixed income, particularly credit derivatives. Now I turn to rough times in equities with an emphasis on whether it is time to enter the short side of the stock market. The madness of crowding into the "credit, energy, Asia, emerging markets" growth story will reach a point of froth this winter. Below I make a case for profit in short side beta and alpha.

Marketing to the West – Lives Made Easier

December 2005 | Eurekahedge


There has been a burgeoning interest from global investors over the past four years in the Asian hedge fund space. Newly launched fund managers with a good business model and compelling performance are getting above the critical mass needed to run a business much faster. Notwithstanding the much-abused catchphrase 'Asia is hot', the region is indeed still characterised by information asymmetries, and an understanding of the industry's growth and performance dynamics is not without its benefits. It is to this end that this write-up highlights some of the key trends in Asian hedge funds over the past few years.

Shareholder Returns A Secular Trend in the Japanese Stock Market: A Long/Short Perspective

December 2005 | Jens Muenster, Trident Pacific Capital


There are many ways for a successful long/short hedge fund manager to generate absolute returns. Some managers are very good stock pickers based on fundamental analysis and visiting hundreds of companies every year; some make excellent timing decisions based on technical analysis without ever visiting a single company; and others manage to combine the two successfully. While much of this depends on the talent and skills of the individual fund manager, one of the most promising ways to achieve absolute returns is to catch and ride on a so-called secular trend.

The AUM Challenge for Hedge Funds in Singapore

December 2005 | Justin Ong and Ivan Perfiliev, PricewaterhouseCoopers, Singapore


Much has been written lately about the high rate of growth in the number of Singapore-based hedge fund managers. A conducive regulatory environment coupled with the relatively low cost of operations have both contributed to the unprecedented growth of hedge funds in Singapore over the last couple of years. Yet, notwithstanding these, gaining critical mass still seems to be an elusive goal for many Singapore-based hedge funds.

MAXAM Capital and Eurekahedge to Launch Three Investable Hedge Fund Indices

December 2005 | Eurekahedge


MAXAM Capital Management LLC, the US investment advisor recently launched by hedge fund pioneer Sandra Manzke and Singapore-based Eurekahedge, the independent hedge fund research firm, are proud to announce the upcoming launch of three investable hedge fund indices – MaxEurekahedge Asia, MaxEurekahedge Japan and MaxEurekahedge Global Emerging Markets. These investable index products are the first exclusively regional indices to be offered alongside the current spectrum of global investable hedge fund indices in the marketplace today. Each investable index will focus on regional hedge fund talent in Asia, Japan and the Emerging Markets and will offer investors comprehensive exposure to a broad range of top hedge fund managers in each territory.

Hedge Fund Performance Commentary

November 2005 | Rajeev Baddepudi, Eurekahedge


Hedge funds had a spectacular run in September, reflecting the significant boost to market activity from a sluggish August. Most Eurekahedge regional hedge fund indices were up on the right side of 3% for the month, as is evident from the graph below. Even the under-performing region, North America, registered a spike in its return gradient, rising 1.27% to August's 0.56%.

2005 Overview: Key Trends in Long-only Absolute Return Funds

November 2005 | Eurekahedge


The Eurekahedge Absolute Return Fund (ARF) Database has now grown to cover over 200 long-only ARFs that together represent in excess of US$20 billion in managed assets. Long-only ARFs are a recent addition to the alternative investment landscape and have grown in both size and number only in the past few years. Their increasing popularity among institutional investors is driving more hedge funds – leveraging on their presence and experience in the equity markets – to launch long-only products. Also, over the years, huge capital inflows into hedge funds have brought on an environment of shrinking conventional opportunities, especially on the short side. Hence these funds find the long-only space a lucrative alternative, particularly so in relatively harmless, if not positive, equity market conditions.

Interview with Willy Ballmann and Dr Tan Lien Seng, Portfolio Managers of SHK Quant Asia Fund

November 2005 | Eurekahedge


SHK Fund Management Ltd (SHKFM) manages the SHK Quant Asia Fund, a quantitative and market neutral pan-Asia equity long/short fund, with a scalable system-driven investment process. SHKFM is a subsidiary of Hong Kong Stock Exchange-listed Sun Hung Kai & Co Limited, a leading financial services and investment holding company in the Greater China region.

Tapping into Currency Alpha

November 2005 | Pierre Lequeux, ABN AMRO Asset Management Ltd


Currency markets have probably been one of the more significant sources of disappointments and frustrations for economists. Witness to this higher degree of complexity relative to other markets are the comments made by Federal Reserve Chairman Alan Greenspan whilst speaking at the Senate Banking Committee on 16 July 2002: "We at the Federal Reserve have spent an inordinate amount of time trying to find models which could successfully project exchange rates, not only ours, but everyone else's. It is not the most profitable investment we have made in research time". It is clear that currencies are indeed very different when compared to other asset classes.

The Global Dream: The Use of Master-Feeder Fund Structures by Asian-based Hedge Fund Managers

November 2005 | Effie Vasilopoulos and Katherine Abrat, Sidley Austin Brown & Wood (Hong Kong)


With the hedge fund industry booming worldwide, Asian-based hedge fund managers are exploring ways to access the huge pool of potential investors in the United States and other key financial centres around the world. Largely driven by this growing momentum, Asian-based hedge fund managers are increasingly utilising master-feeder structures to establish a product that is attractive to international investors, thereby significantly widening their target investor base beyond the traditional Asian stomping ground.

Hedge Funds vs Private Equity Firms in the Alternative Investment Community

November 2005 | Jayesh Punater, Gravitas Technology


Hedge funds have led the charge in the alternative investment community as a viable and growing segment of the buy side/asset gathering industry. Some of the brightest and smartest people from the industry have not only started hedge funds, but lately have started large "institutional", multi-strategy funds that span the globe looking for opportunities in which to trade. However, lately, as a technology provider to this industry, we at Gravitas are noticing with increasing frequency, private equity firms "spinning out" of larger institutions and establishing their own identities. Furthermore, many "hybrids" have followed in their own rite.

Hedge Funds – Some Issues for Pension Fund Investors

November 2005 | Andrew Smithers, Smithers & Co


It is widely, if not universally, agreed that the world is experiencing a period in which intentions to save tend to outrun intentions to invest. Alan Greenspan and Ben Bernanke, who is Chairman of the US President's Council of Economic Advisors, are among those who have pointed to this probability. If economic policy did not counteract this, the result would be a world recession. Fortunately this has so far been avoided or at least postponed by the easy fiscal and monetary policies.

Bridging the Gap Between Academic Research and Applied Finance – the ICMA Centre and Eurekahedge Partnership

November 2005 | Eurekahedge


The ICMA Centre from the University of Reading, UK and Eurekahedge are pleased to announce a joint initiative to develop working papers on the hedge fund industry. The motivating factor for this partnership is the combined desire to encourage an appropriate risk management approach to alternative investments while bridging the gap between academic research and applied finance.

Hedge Fund Performance Commentary

October 2005 | Rajeev Baddepudi, Eurekahedge


August was a good month for hedge funds on the whole, with most of the Eurekahedge regional indices up by over 1% on average. The month's events were dominated by the yet-to-be fully evaluated effects of Hurricane Katrina, its ripple effects on energy prices (up by about US$10 per barrel from US$61 at the start of the month, breaching the US$70 mark) and global bond yields, as well as on economies with a significant proportion of their budgets going into fuel subsidies, in the Asia-Pacific region. A case in point is Indonesia, whose fuel subsidies account for about 30% of its budget spending.

2005 Overview: Key Trends in Latin American Hedge Funds

October 2005 | Eurekahedge


The size of the Latin American hedge fund market (including both onshore and offshore funds) is around US$24 billion, representing approximately 2% of the global hedge fund industry. There are close to 200 hedge funds with a Latin American mandate, which saw an annualised growth rate of assets close to 60% since 1991.

2005 Overview: Key Trends in Asian Hedge Funds

October 2005 | Eurekahedge


Asia Pacific markets make up 15% of the world's market capitalisation but Asian-strategy hedge funds represent only 6.5% of the world's hedge fund market by assets. However, the robust growth seen since 2000, is a definitive indicator that this disconnect is continuing to close. Asian-strategy hedge funds have witnessed a strong growth since 2000, with assets increasing 35% per annum and Asia is also home to some world-class managers who typically still have capacity unlike in more developed markets.

The Hedge Fund Life Cycle Concept – Those Feisty Adolescents Still Run Fastest

October 2005 | John E. Dunn, III, Infiniti Capital


Although it is difficult to make sweeping generalisations in the hedge fund industry, one frequent generalisation commonly observed by industry participants is the phenomenon of better performance among early stage hedge funds. The result of serious academic study, this phenomenon was first popularised by a published study by CrossBorder Capital (using data from TASS and the TASS Graveyard Database). The CrossBorder study found that "adjusted for survivorship bias, the youngest decile funds beat the oldest decile by 970 basis points per annum", a statement often repeated in marketing documents of many funds of early stage hedge funds.

Current Trends in the Japanese Hedge Fund Industry

October 2005 | Peter Douglas, GFIA pte ltd


Last month we wrote in rather uninspired terms about the revaluation of the renminbi. This month's "news" story is much more important. Only in Japan could the convincing re-establishment of an almost 60-year old political dynasty be called news! But Koizumi now has both a clear mandate in personal terms, and a near-invincible political toolkit, to force real change in Japan.

A Joint Venture to Seed Asian Hedge Funds

October 2005 | Eurekahedge


Arlington Group and Eurekahedge have formed a joint venture to provide seed capital and support to Asian hedge funds and Asian long-only absolute return funds. Arlington will commit seed capital to the individual funds while Eurekahedge will provide origination, analytical support and the full resources of its globally based capital introduction team (New York, Geneva, Zurich, London, Tokyo, Hong Kong and Singapore). Richard Armstrong, one of Eurekahedge's founding partners and Joseph McCarthy, Arlington's Asia-focused investment manager, will jointly be responsible for managing and developing the seeding platform.

What Are Hedge Fund Index Equilibrium Returns?

October 2005 | Laurent Favre, AlternativeSoft AG


In this article, we will compute the equilibrium returns for the hedge fund strategies for the next 3 to 5 years using a model that accounts for non-linearity in hedge fund indices. We have learned at the university, in our finance books, in the press or from our financial advisor that the asset returns depend on its exposure to the market, the so-called beta. An asset with a high beta has, in the case of positive market returns, an expected return near or higher than the market. An asset with a low beta has a low expected return near the risk free level.

Hedge Fund Performance Commentary

September 2005 | Shashi K. Agarwala, Eurekahedge


Despite an eventful month with terrorist attacks in London, rising oil prices, yuan revaluation and benign US employment figures, hedge funds maintained their good performance across the globe in July following a recovery month in June. European investing hedge funds again came up with the best performance across all markets with the Eurekahedge European All Strategies Hedge Fund Index registering a 2.07% return. North America and Asia ex-Japan and North American markets were the two next best performers in terms of rankings with returns of 1.89% and 1.84% respectively.

Interview with Edward Cartwright of KGR Capital

September 2005 | Eurekahedge


Established in late 2002, KGR Capital provides specialist management and advice on investments in Asian hedge funds. Its flagship fund, KGR Capital Asia Pacific Absolute Return Fund, is a diversified multi-strategy, multi-manager portfolio of Asian hedge funds.

Funds of Hedge Funds: Strategy Outlook Going Into 2006 and Innovations in Pricing Structures

September 2005 | Gary Vaughan-Smith, ABN AMRO Asset Management


In the past few years the hedge fund market has grown in a spectacular manner, with total assets surpassing US$1 trillion in the first half of 2005. This growth has been aided by the lacklustre returns on the equity markets since the burst of the dotcom bubble in 2000 and by a benign climate for many hedge fund strategies, resulting in double digit annual returns for many hedge funds. However, with the strong increase in hedge fund assets, in combination with a changed market environment, it has become more difficult to make the same returns in many hedge fund strategies. In relative value arbitrage strategies in particular, more money seems to be chasing a smaller set of opportunities, resulting in lower or even negative returns.

Setting up an Asian Fund Manager – Singapore or Hong Kong?

September 2005 | Nigel Poh, Eurekahedge


As assets managed by hedge funds globally pass the US$1 trillion mark, voices of the rational shadows whisper that the industry is due for a market correction. Yet fears of a bubble in the industry may be unfounded at least from an Asian perspective, which many see as an emerging opportunity-rich sector essentially catching up with the US and Europe in terms of strategy sophistication and market deployment.

CECA and Its Applicability to Hedge Funds

September 2005 | Leena Pinsler, Rajah & Tann


The Comprehensive Economic Co-operation Agreement ("CECA") between Singapore and India is the first of its kind that India has signed with any country as well as the first that Singapore has signed with a developing country. CECA integrates agreements on trade in goods and services, investment protection and promotion and economic cooperation in fields like education, intellectual property, science and technology.

Spanish Hedge Funds - Close to a Reality

September 2005 | Jesus Mardomingo, Jorge Canta Cuatrecasas


Act 35/2003 on Collective Investment Institutions ("Act 35/2003"), implementing UCITS III, introduced a new scenario for the Spanish collective investment institutions ("CII"). In order to develop this Act further, on October 13 2004, the Ministry of Finance published the first Draft Regulation on CII, which included one of the most eagerly-awaited developments: the regulation of hedge funds. However, it established requirements such as the calculation of daily NAV and the impossibility to invest in offshore hedge funds, which rendered the Spanish hedge funds market uncompetitive, since it was too restrictive.

Hedge Fund Performance Commentary

August 2005 | Eurekahedge


Hedge fund performance across the globe perked up in June following a mediocre month in May. According to the Eurekahedge Hedge Fund Indices, the top three markets were Europe (+1.76%), Japan (+1.49%) and North America (+1.47%). Comparatively, Japan was down 0.17% in May and Europe was up 0.32% over the same period.

Eurekahedge Maintains the World’s Largest Suite of Hedge Fund Indices

August 2005 | Eurekahedge


The suite of 150 hedge fund indices is available at www.eurekahedge.com/indices and on Bloomberg at HDGE. Key tools include a graphing function, fully downloadable performance history, benchmarking against equity indices, and downloadable risk and return statistics. Reasons for the launch of so many indices have been driven by demand from our single and multi-manager clients looking to benchmark against a relevant index that more closely mirrors their regional and strategic mandates, and also demand by investors to ensure their managers are outperforming a "bucket" of their peers.

Latin America Wakes Up to the Equity Culture

August 2005 | Enio Shinohara, GFIA Pte Ltd


In contrast to how hedge funds evolved elsewhere, and in particularly in Asia, in Latin America the dominance of fixed income and debt markets explains the creation of many macro and multi-strategy funds, in detriment of other strategies, including equity long/short.

Real Estate: Its Place in the Hedge Fund Universe

August 2005 | Alexander Kinmont, Prospect Asset Management


From the period of their earliest development by A.W. Jones in 1949, hedge funds have concentrated on listed securities. The reasons for this are simple. As conceived of by A.W. Jones, a hedge fund's purpose was the pursuit of alpha, of returns uncorrelated with those of the market. In order to operate in this way it is first necessary to define the "market". The "market" should be large, liquid, and display a high degree of inefficiency.

May Performance Analysis

July 2005 | Eurekahedge


The comparison in the wealth creation chart demonstrates how well the European hedge fund markets have performed versus the local equity markets this year. The month of May continued with the good showing; the Eurekahedge European Hedge Fund Index was up 32 basis points as compared to the local equity index, which was down 17 basis points over the same period. Out of all the funds with a European mandate, around 70% of funds have netted positive returns till May 05.

Interview with David Gong, CFO at PRECISE Asia Pacific Fund

July 2005 | Vincent A. van Antwerpen, Janwillem P. Engel, Harry M. Kat, Theo P. Kocken


Precise Asia Pacific Fund is managed by Singapore-based Precise Asset Management. The fund adopts a long/short equities strategy driven by a quant investment model and aims to achieve consistent capital appreciation in both positive and negative markets through investing in the most liquid listed securities in Asia, including Japan, Korea, Taiwan, Hong Kong and Australia. The Precise Asia Pacific Fund will be launched in July this year.

Eurekahedge Launches 250 Hedge Fund Indices

July 2005 | Eurekahedge


Eurekahedge is proud to announce the launch of the world's largest suite of hedge fund indices (250+) available at www.eurekahedge.com/indices and on Bloomberg at HDGE. Key tools include a graphing function, fully downloadable performance history, benchmarking against equity indices and downloadable risk & return statistics.

From Delivering to the Packaging of Alpha

July 2005 | DNoël Amenc, Philippe Malaise and Lionel Martellini, Edhec Risk and Asset Management Research Centre


With currently almost US$1 trillion in assets under management, hedge funds have seen impressive growth over the past decade and providers of such investment vehicles do not lack arguments why investors should try to gain exposure to hedge funds. From an initial phase, where some high net worth individuals invested in hedge funds, the industry made it into the mainstream as more and more institutional investors have started allocating to, or at least looking at, hedge funds as a distinct asset class.

The Realities of Due Diligence on Established Managers

July 2005 | Dr John S. Wisnioski, Gan Consulting Pte Ltd


The due diligence process is one of the most discussed topics with respect to the burgeoning investment asset class called hedge funds. I have helped develop an underlying hedge fund manager from less than US$10 million under management to close to US$150 million in about 18 months when our performance was only 10%+.

Does Location Matter?

July 2005 | Shashi Agarwala, Eurekahedge


We thought it would be interesting to compare the returns of the hedge funds in our database based on their locations. In this analysis, we examined a sample of Japanese long/short equity funds. Analysing the returns data since 1998 shows that Japan-based long/short equity funds have been generating almost 50% more returns than its counterparts in the United States, Hong Kong, Singapore and Australia. The returns however are slightly over 3 times higher than the Japanese long/short equity funds based in the UK.

The Asian Masters of Hedge Awards 2005

July 2005 | Eurekahedge


On Friday the 27th of May over 300 members of the global hedge fund community turned up to congratulate the winners of The Asian Masters of Hedge Awards 2005. The truly global make-up of attendees again showed the immense interest in the Asian region from the US and Europe. With more than 120 people from hedge funds and over 80 people from investment organisations, we are pleased we succeeded in bringing together as many hedge funds and investors.

Convergence in Action

June 2005 | David Goldstein, White & Case


This is indeed a very special gathering; there are not many industry venues where both sides of the alternative asset management family are brought together to talk about matters in common. Of course, what we are here to talk about today is how these two disciplines are moving towards each other in many different ways - this is the notion of convergence. While this process is just getting underway in Asia, it is very far advanced in the US and Europe, and perhaps by discussing the trends we've seen you will have some insight into what may happen here.

Interview with Veronika Hirsch, Fund Manager at BluMont Capital

May 2005 | Eurekahedge


Toronto-based BluMont Capital is one of the fastest-growing alternative investment firms in Canada and is home to Veronika Hirsch, one of Canada's leading hedge fund managers. In Canada, BluMont offers a wide range of funds, from single manager/open-ended products to multi-strategy/multi-manager structured products with principal guarantees. For international investors, BluMont has just launched an offshore version of its successful long/short fund. The fund duplicates a strategy that has been in existence since January 2001 and as of 28 February 2005 had an annualised return of 18.7% and an annualised volatility of 9.9%.

Integrating Hedge Funds into the Traditional Portfolio

May 2005 | Harry M. Kat, Professor of Risk Management, Cass Business School, City University, London


In this summary paper we show how investors can neutralise the unwanted skewness and kurtosis effects from investing in hedge funds by (1) purchasing out-of-the-money equity puts, (2) investing in managed futures, and/or by (3) overweighting equity market neutral and global macro and avoiding distressed securities and emerging market funds. We show that all three alternatives are up to the job but also come with their own specific price tag.

The Case for Levered Fund of Hedge Funds

April 2005 | Pergament Advisors, LLC


Although recent media reports tout the rising popularity of multi-strategy hedge funds, a strong argument can be made for the advantages of investing in a levered fund of hedge funds (FOHF). A levered fund of funds is one that invests money in many hedge funds on behalf of individual and institutional investors using leverage, essentially borrowed money, to achieve double digit returns while mitigating downside deviation.

Questions Non-US Hedge Fund Managers Are Asking Themselves After the SEC Requires Advisers' Registration

April 2005 | David Goldstein, White & Case


On October 26, 2004, the US Securities and Exchange Commission (the "SEC") adopted new rule 203(b)(3)-2 and conforming and transitional amendments to other rules (collectively, the "Rules") under the Investment Advisers Act of 1940 (the "Act") that will require most hedge fund advisers to register with the SEC. The SEC also amended the form required to effect registration, Form ADV. Most unregistered US and non-US advisers of hedge funds currently rely on the "private adviser" exemption from registration under the Act for an investment adviser that has had fewer than 15 clients during the preceding 12 months.

2005 Overview: Key Trends in Asian Hedge Funds

March 2005 | Eurekahedge


While the year in 2004 saw respectable gains for many managers, it was not the stellar year which we saw in 2003. The ABN Eurekahedge Asian Hedge Fund Index gained almost 9% through the year, falling short of the 27% gains in the previous year. In contrast, the MSCI AC Asia Pacific Free Index and the MSCI AC Asia Pac. Free Index ex Japan rose by 16% and 19% respectively over the year.

The Seven Habits of Highly Effective Hedge Funds

March 2005 | David Aldrich and Marina Lewin, The Bank of New York


Over the next five years, a large pool of institutional money will pour into hedge funds. Those funds with highest operational standards will catch the wave. For several years, explosive growth has been the norm in the hedge fund industry. While that growth is not likely to abate any time soon, the source of new capital is shifting rapidly. Institutions - particularly pension funds - will become the primary source of capital for hedge funds. Their demands will change the industry.

Survey: Hedge Funds Address Risk Management - But Not Uniformly

March 2005 | Greg Eckert and Eric Gronningsate, PwC


As hedge funds continue to become more institutionalised, sponsors are adjusting their risk management strategies to manage growth in a way that safeguards the firm’s reputation and maintains operational efficiency. Firms are tailoring their risk management programs to achieve an optimum balance between fostering growth and ensuring proper control over investment and operational risks.

Asian Hedge Funds: December Performance, 2004 Overview and 2005 Outlook

February 2005 | Fiona Voon,Eurekahedge


2004 was a trendless and choppy one for hedge fund managers, with a contraction of volatility on both an implied and realised basis, making it difficult for volatility strategies to perform. With the markets trading within fairly narrow bands, it proved a challenge for directional strategies. Relative value managers also found themselves increasingly squeezed by the rising wall of money thrown into the markets by new funds. However, the increase in the number of funds has served to increase liquidity in many markets; and the greater ability to short has helped funds in some previously difficult markets like India and Indonesia. Emerging market debt and distressed strategies were the best performers for the year due to some of the lowest yield spreads in a generation. They were followed to a certain extent, by event-driven strategies.

A Tool to Construct an Optimal Fund of Funds

February 2005 | Laurent Favre, Founder, AlternativeSoft AG


To construct an optimal fund of funds, the risk and return of each hedge fund included need to be identified. In this article, we will focus on defining the kinds of risk and return required. First, we have to define what the risk is for a hedge fund investor or a fund of funds investor. Risk is the possibility that, in the future, the investment's value will be lower than today's value or lower than a certain threshold. This threshold might, for example, be the 5% annualised return for a Swiss pension fund. Does volatility measure that? The answer is no. This is why a better measure of risk is downside risk. Downside risk can be the Omega measure, the Modified Value-at-Risk, the Conditional Value-at-Risk or the downside volatility.

The Board's Role In Hedge Fund Valuations

February 2005 | Eurekahedge


Many European hedge funds have Boards of Directors ("the Board"). As pressures build to achieve more consistency and ultimately global standards in hedge fund valuation processes and structures, here are four areas which the Board needs to be addressing today:

Eurekahedge Hedge Fund Indices Methodology

February 2005 | Eurekahedge


Due to the relatively small size and opacity of the Asian hedge fund industry, we felt there was a need to increase the exposure of Asian-based managers and to offer an indication of their performance. The Eurekahedge indices allow us to do this by highlighting the returns of the industry as a whole. The indices also serve to highlight to investors the kind of impressive returns possible from the Asian hedge fund sector. There are three indices in our family, namely the Eurekahedge Index, the Eurekahedge Japan Index and the Eurekahedge Asia ex-Japan Index.

Asian Hedge Fund Performance – 3-month Analysis and Outlook

January 2005 | Eurekahedge


Asian hedge funds posted their largest gains of the year in November, with a 3.03% gain overall, and a 3-month return of 4.71%. In fact, the gains were the best since mid-2003. The charge was led by the ex-Japan region, which gained 3.93% for November, and emerging markets, which added to this year's excellent returns with their best monthly performance since early 2001. Conversely, a 5% drop in Japanese equities for the month slowed the Eurekahedge Japan Index to a 0.5% gain. Japan's sluggishness reflects poor economic data and a slower-than-expected recovery. In general, most of the gains in the last three months were from currency appreciation due to the declining dollar. Asia's emerging markets continue to be the hot sector and the favourite global play is still long Asian currencies versus a short dollar.

2005 Overview: Key Trends in Absolute Return Funds for November

January 2005 | Eurekahedge


Absolute Return Funds (ARFs) returned on average 3.2% for the month of November and have returned an impressive 9.5% year to date. Eurekahedge has over 150 funds listed in its Absolute Return Fund Database, where funds are categorised into Bottom Up, Top Down, Dual Approach and Diversified Debt. Among these strategies, Dual Approach funds, which combine a value, fundamental-driven stock picking approach with more top-down macro exposure than Bottom-Up funds, achieved the best returns - 5.03% - in November. Most of these gains came from emerging markets in India, the Baltic States and the Asia Pacific.

In Praise of Hedge Fund Volatility

January 2005 | Byron R. Wien, Equity Research, Morgan Stanley


Alternative investments have become the fashionable asset class of choice for pension funds, charitable endowments and wealthy individuals. The initial attraction was the outsized returns of the 1990s, but the concept of being able to show positive performance in both favourable and unfavourable markets has proved equally compelling. Many hedge funds promise less volatility than long-only investors, and this is appealing to fiduciaries. After the collapse of Long-Term Capital Management, blow-up risk became a selection factor for institutions. Nobody wanted to lose significant capital with a single manager, especially one who promised a “market neutral” approach.

The Dangers of Mechanical Investment Decision-Making: The Case of Hedge Funds

January 2005 | Harry M. Kat, Professor of Risk Management and Director Alternative Investment Research Centre, Cass Business School, City University


Over the last 20 years, investors have come to approach investment decision-making in an increasingly mechanical manner. Optimisers are filled up with historical return data and the 'optimal' portfolio follows almost automatically. In this paper we argue that such an approach can be extremely dangerous, especially when alternative investments such as hedge funds are involved. Proper hedge fund investing requires a much more elaborate approach to investment decision-making than currently in use by most investors.

Hedge Fund Performance Commentary

December 2004 | Eurekahedge


Global markets breathed a sigh of relief after the US presidential election, and October returns marked the beginning of renewed confidence in a sustainable recovery in the United States and in the Asia Pacific. A steady search for profits continued to push share prices cautiously higher. In line with these increases was the ABN AMRO Eurekahedge Asia-ex Japan Index, which was up 1.04% for the month of October.

2004 Overview: Key Trends in Global Funds of Funds

December 2004 | Eurekahedge


The boom in the fund of hedge funds (FOF) industry in 2003 was a hard act to follow. Although the number of launches was down from the previous year, total asset inflows continued at a record pace. Cynics predicted that the massive inflows of that year and slack regulation would be pursued by a rude awakening in the form of whittled returns, bloated portfolios and whip-cracking regulatory commissions searching to make an example as a warning to speculative, secretive managers, who have been blamed for almost every market shift this year - from oil price increases to fraud allegation-induced collapses in companies' stock prices.

Interview with Lam Poh Min, Partner of Octagon Capital Pte Ltd

December 2004 | Eurekahedge


Octagon Capital adopts a quantitative approach to investing and is run by Lam Poh Min and Nelson Chia in Singapore. Poh Min has ten years of portfolio management experience. Prior to setting up Octagon, he spent nine years with Singapore's Government Investment Corporation (GIC). He was a senior portfolio manager in the quantitative investment unit. Nelson was a trader at GIC for nine years, working in Singapore, London and New York.

Hedge Fund Interview with Florian Bartunek and Eduardo Munemori of Constellation Asset Management

December 2004 | Eurekahedge


Constellation Asset Management manages the Constellation Fund, an equity long/short fund that invests primarily in Latin America. The fund trades the following strategies: relative value, pair trading, merger arbitrage, capital structure arbitrage and convertible bond arbitrage. The fund does not invest heavily in the fixed income markets. The founding partners and co-portfolio managers, Florian Bartunek and Eduardo Munemori, are based in Sao Paulo, Brazil.

Management Quality (MQ) Ratings for Administrative Service Providers

December 2004 | Enrico Bucalossi and Vanessa Robert, Moody's Investors Service


Every hedge fund investment manager will, at some point, face the critical question of selecting an administrator to whom to award the administrative mandate for the funds. Nowadays, finding the appropriate solution to this question is not always a straightforward task and many fund managers struggle to identify the best possible deal. As the demand for hedge and alternative investment products grows, so does the need for fund administrators capable of providing innovative outsourcing solutions and supporting increased product complexity and sophistication.

Institutional Demand for Hedge Funds: New Opportunities and New Standards

December 2004 | Casey, Quirk & Acito and The Bank of New York


The hedge fund industry is midway through an important transition in its source of capital. Five years ago, hedge funds derived virtually all of their assets from wealthy individuals. Institutional interest was limited to a small number of endowments and foundations. Over the next five years, institutions (including pension funds) are likely to provide an additional $250 billion of hedge fund capital, accounting for 35 percent of net new flows in this period. Coupled with the increasing influence of the fund of hedge fund industry, new hedge funds will be dependent on "professional" sources of capital for 70 percent of their capital

Opportunities Abound as China's Fund Market Opens Up

December 2004 | Yang-Chew Ooi and Cheng-Sen Yeh, PricewaterhouseCoopers, China


China's funds industry is in its infancy. Since the introduction of the regulated funds regime by the China Securities Regulatory Commission ("CSRC") in 1997/98, China has experienced an unprecedented growth in its funds industry, as shown in the diagram below.

Interview with Harvest Investment Partners

November 2004 | Eurekahedge


Harvest Investment Partners manages the Harvest Asia Fund, an Asia ex-Japan, long / short equities fund. Singapore-based Harvest Investment Partners was established in July 2003 by Tiong Jin Yan, Michelle Tan-Chian and Michael Liang. The fund has generated returns of 2.33% year-to-date and 5.51% since inception (November 2003).

Interview with Laurent Favre, Founder and CEO of AlternativeSoft LLC

November 2004 | AlternativeSoft LLC


With the increase in the amount of hedge funds under management as well as the high demand for investors in this type of investment, a new company is launching itself into constructing and selling an IT platform designed to construct traditional portfolios and funds of hedge funds: HFOptimizer platform.

Shaping the Regulatory Framework so Hedge Funds can Achieve Scale

November 2004 | Marie-Anne Kong and Didier Prime, PWC


How do hedge fund demand, regulation, structures and scale interact and fuel each other in Europe and Asia? Everywhere funds-of-hedge-funds are gaining momentum. In Europe there is emphasis on hedge funds (and funds-of-hedge-funds) domiciled domestically or in pan-European centres. Offshore domiciles are increasing regulation to compete. Asia has experienced dramatic activity in both hedge fund demand and supply, but lack of scale has been a frustration there and elsewhere. Differing regulatory requirements mitigate against scale, and more investor and distributor education is needed, but who will bear the cost of lobbying and education efforts?

2004 Overview: Key Trends in Latin American Hedge Funds

October 2004 | Eurekahedge


The number of new funds jumped over the past four years for two reasons: investment bank closures or mergers in Brazil have forced money managers to set up on their own and the increase of Brazilian onshore assets into alternatives has spurred managers to leave established houses. Success stories like Gavea and JGP have also been an inducement. From the chart below, the number of new funds reached 37 in 2003 and we expect that number to be between 35 and 40 for 2004. We gather that the total hedge fund universe, both offshore and onshore, to be around 220 funds.

Hedge Fund Interview with Arcus Investment

October 2004 | Eurekahedge


Arcus Investment was established in the mid 1998 by three partners who own the company, Peter Tasker, Robert Macrae and Mark Pearson. Arcus runs two other hedge funds, Arcus Japan Long/Short Fund and Arcus Zensen Fund.

Hedge Fund Interview with Jaguar Funds

October 2004 | Eurekahedge


The Jaguar Australian Leaders Long Short Fund Limited was established in 2003 by Glenn Rosewall and Robert Hunter. Jaguar Australian Leaders Long Short Fund Limited is its flagship fund. The fund is a long/short equity fund investing exclusively in Australia. It was launched in March 2003 and was +17.3% in 2003 and is +3.7% in 2004.

Technology, Efficiency and the Portrait of the Long/Short Equity Hedge Fund Manager with an Operational Edge

October 2004 | Peter V. Rajsingh, Global Partners Group


A hedge fund manager's marketing pitch to potential allocators normally focuses on investment strategy, performance, risk management, principals' pedigree, etc. Few managers broach operational issues in any detail, aside from naming the fund's administrator, prime broker and legal counsel in passing.

Analysing Hedge Funds: There's More to Consider than Average Performance

October 2004 | Miklos Nagy, CFA, CFP, Canadian Hedge Watch Inc


When considering any investment, prospective investors and their advisors look first at its returns and then at the risk patterns of its past. For mutual funds and traditional equity investments, these past return performance patterns are likely to be more indicative of what may be expected in the future but, when it comes to hedge funds, this is not necessarily the case.

Mind the (Transparency) Gap!

October 2004 | Olwyn Alexander, CFA, PWC


There is a yawning gap between the information required by investors to adequately assess the nature of a hedge fund and what the hedge fund industry has traditionally provided, whether from habit, lack of resources or proprietary concerns. That is now changing with interest from new kinds of investors and from regulators. Areas ripe for increased transparency include performance fee structures, equalisation, level of fees in funds-of-funds, foreign currency hedging between share classes and changes with the advent of International Financial Reporting Standards, to name a few on which we have suggestions

Interview with CLC Management

September 2004 | Eurekahedge


CLC Managament manages the Global Partners LP, a long/short equity fund focused on exchange-traded closed-end funds trading at historical high or low variations from its NAV. The Chicago-based firm is co-founded by Anthony Cutinelli and Andres Lucas.

Hedge Fund Interview with Alteris Investment Managers

September 2004 | Eurekahedge


Founded in 2002 by Kaveh Jahromi, Alteris Investment Managers specialises in hedge funds. The Sydney-based firm manages the Australian Absolute Return Fund and will soon launch the Asia Pacific Absolute Combined Fund. Alteris tells us more about the latter in this interview.

Hedge Fund Interview with Neil Baim, Managing Director of the Abernathy Group

September 2004 | Eurekahedge


With the proliferation of hedge funds in recent times, how do managers identify potential investment opportunities and keep a competitive edge? The Abernathy Group has developed a unique Collaborative Investing® model which gives them better insight of their target sectors. Eurekahedge caught up with Neil Baim, Managing Director, and asked some questions.

New Trends in Singapore's Hedge Fund Industry

September 2004 | Justin Ong and Ivan Perfiliev, PwC Singapore


The hedge funds industry in Singapore has undergone significant development and growth over the past 18 months. In particular, the number of hedge funds managed from Singapore has grown from a little over 10 to more than 49 within that period of time. What is the reason for this? Where is the industry heading?

Hedge Fund Structures and Regulatory Positions in Hong Kong, Singapore and Japan

September 2004 | Eiichi Kanda & Tatsuhiko Kamiyama, Clifford Chance (Tokyo) LLP; Mark Shipman, Clifford Chance, Hong Kong; Choo Wai Hong, Clifford Chance Wong, Singapore


The preferred hedge fund structure for Hong Kong based managers/advisers tends to be an offshore limited liability company. The main factors determining this preference is investor familiarity and that such a vehicle is relatively low risk to the hedge fund manager i.e. it has a separate legal identity distinct from the management functions, and is easy to operate with respect to day to day subscription and redemption of shares. Furthermore, offshore jurisdictions used such as Cayman Islands, British Virgin Islands and Bermuda,are tax neutral.

Playing It Safe with Managed Futures

September 2004 | Man Investments


Demand for managed futures is soaring as investors, stung by losses from equities during the bear market and attracted by historically high returns from the strategy, stream into alternative investments to pep up their portfolios and diversify risk. Total assets in managed futures have more than doubled since the end of 2002, rising from US$ 50.1 billion to US$ 104.6 billion on 31 March 2004, according to data from Barclay Trading Group. In the first quarter of this year alone, assets in managed futures rose by US$ 18.1 billion, or 20.9%, with a lot of that new capital coming from traditionally conservative institutions.

A Review of the Differences Between Traditional Investment Programs and Absolute-Return Strategies

September 2004 | Hilary Till and Joseph Eagleeye, Premia Capital Management


Given the ongoing stock market downdraft since March 2000, U.S. mutual fund inflows have dramatically slowed down while hedge fund investing has exploded. As a matter of fact according to Galbraith and Viviano (2002) of Morgan Stanley, net hedge fund inflows grew to the same size as net mutual fund inflows in 2001.

Alternative Investment Certification Sees More Demand

September 2004 | Chartered Alternative Investment Analyst Association


Explosive growth in the use of alternative investments and calls for greater hedge fund regulation have heightened the need for standards within the industry. In Amherst, Mass., a not-for-profit organisation known as the Chartered Alternative Investment Analyst Association, has taken steps to fill the need. Designed for alternative investment specialists, the two-level examination programme covers real estate, commodities, private equity, managed futures and hedge funds. Candidates for the CAIA designation are asked to analyse, differentiate and evaluate situations pertaining to the alternative investment markets, and to understand industry-accepted standards for professional conduct.

2004 Overview: Key Trends in European Hedge Funds

August 2004 | Eurekahedge


The number of new European-based hedge funds grew rapidly over the past year, though growth now appears to be slowing slightly. Investment bankers, analysts and fund managers continue to leave salaried jobs at major banks to set up boutique firms where the initial income stream may not arrive until two or three years after launch.

Interview with Binjai Hill Asset Management

August 2004 | Eurekahedge


Justin Kendrick is one of the three Principals and the Head of Business Development at Binjai Hill Asset Management (BHAM), based in Singapore. BHAM will advise the BINJAI HILL ASIAN ACORNS FUND, an Asian ex-Japan long/short equities fund with a long bias and focused on smaller-to-mid cap stocks. The BINJAI HILL ASIAN ACORNS FUND is scheduled to launch on August 10th and is aiming for moderate volatility and an absolute return of 20-25% per annum.

Latin American Hedge Funds

August 2004 | Enio Shinohara, GFIA Pte Ltd


The objective of this article is to provide a general assessment of the new but rapidly-growing hedge fund industry in Latin America, identifying the key growth drivers from both supply and demand sides. We briefly examine the market environment and how the industry has evolved in recent years. Also, this article aims to give an overview of the industry including strategies, location, size, organisation/people, specific characteristics of the local industry, and some thoughts on possible future developments.

A Legal Primer for Understanding the Hedge Fund Market in Japan

August 2004 | Tokyo Investment and Hedge Fund Support Desk, White & Case


The hedge fund industry in Japan is currently experiencing an unprecedented period of growth. Aggressive independent fund management utilising advanced alternative investment management techniques specifically designed for Japanese institutional and high net worth investors was difficult to imagine as recently as five years ago. Investment in Japanese markets by foreign capital, once the dominion of "bulge bracket" investment and universal banks, is now equally likely to take place through offshore funds applying a variety of advanced financial strategies to Japanese equity and fixed income markets.

Investing in Distressed Assets

August 2004 | Dean Menegas, Spinnaker Capital Group


Assets are usually considered "distressed" when their value is severely depressed for a reason particular to the issuer and not because of general market conditions. The most common situation is a commercial loan on which the issuer has defaulted on payments of interest or principal. Distressed asset investing generally, and emerging markets distressed investing in particular, are undertaken by a small number of firms. Implementing the strategies successfully requires specific skills and particular economic structures. For those firms with the appropriate professional skills and capital base, however, the strategies can be extremely profitable.

Burying the Myth of Survivorship Bias

August 2004 | Ed Easterling, Crestmont Research


If not the coffin, we have at least a few nails toward dispelling the conventional wisdom about survivorship bias in hedge fund indexes. Our empirical research will demonstrate that hedge funds more often stop reporting returns following periods of positive performance, not when they are likely dying off.

Operational Efficiency - An Integral Part of a Hedge Fund Model

July 2004 | Clare Flynn, Beauchamp Financial Technology Limited


Over the last few years, advising the hedge fund start-up on operations has become an industry unto itself. Indeed, one of the major themes that makes starting a hedge fund attractive is that there exist very few rules dictating how it should be done. And yet, while there is no shortage of people prepared to advise start-up managers, these advisers, in many cases, have not experienced it first hand themselves - they are typically experts in giving advice, rather than experts in starting and operating funds. Speaking as both a former start-up fund manager and, now, a service provider (although not a professional adviser), I believe it is worth sharing a few words on the subject of operational efficiency.

Equity Long/Short - A Two-edged Sword

July 2004 | May Ho, JF Asset Management


Equity long/short strategy is a strategy through which a fund manager buys undervalued stocks which are expected to outperform, and short sells overvalued stocks which are expected to underperform. This type of portfolio is sometimes called “market neutral”, although strictly speaking a market neutral portfolio is achieved only if the long exposure balances the short exposure so as to eliminate systemic market risk. Some market neutral funds even go one step further to eradicate industry risk by making pair-wise bets within each sector, but such an objective can only be achieved if strict risk controls are kept constantly in place. Market neutral portfolios are perceived to be a lower risk type of hedge fund. In reality, however, most equity long/short funds tend to range between a slightly net short position to 100% net long, depending on whether the manager is bullish or bearish on the market, although recently some have widened those ranges.

The Role of Independent Directors in Offshore Hedge Funds

July 2004 | Mark Beames


The recent spectacular corporate collapses of Enron, WorldCom and Tyco in the United States, Parlamat in Europe and HIH in Australia have wiped out billions of dollars of shareholder funds and have exposed serious shortcomings in corporate governance - the system by which companies are directed and managed.

The Asian Masters of Hedge Awards 2004

June 2004 | Eurekahedge


Over 300 people crowded into the Ritz Carlton in Singapore to attend a hugely successful and glamorous evening. Representatives from over 50 service providers, 110 hedge funds and a variety of investors came out in force to show support for the one of the world's youngest and most dynamic hedge fund industries. The evening was a celebration of 2 years of rapid growth and performance in an industry that was at US$14 billion two and a half years ago. Today that industry represents almost US$50 billion in assets under management.

Due Diligence -The Hard Edge of a Soft Science

June 2004 | Peter Douglas, GFIA Pte Ltd


Due diligence is a reality check with an in-built veto, and commences after the manager selection process but before the portfolio construction. It is not part of the manager selection process, although it may be part of a manager elimination decision. It is most effective prior to investment and the work is usually heavily front-loaded, but a certain element is ongoing. Much of due diligence is qualitative, operational, and mechanical - it is only peripherally an investment function.

Emerging Market Debt: A New, and Improving, Asset Class

June 2004 | Paul Luke, Convivo Capital Management Limited


Emerging market debt has only become a recognised asset class for fund managers in the last 15 years. Although emerging markets (formerly called developing countries) have always relied on foreign debt to develop, it has traditionally taken the form of trade finance or syndicated bank loans. Ironically, the current market, which we estimate to be around US$1,500 billion in size, was born out of the huge defaults on sovereign bank debt during the 1980s. Mexico, Brazil, Poland and Argentina, amongst others, were obliged to default on their sovereign bank loans, which were floating rate at a time when the US Fed was hiking interest rates to historically unprecedented levels.

The Rise of Asian Convertible Bonds

June 2004 | Mark Wightman, SunGard's Monis


The Asian convertible bond market has come of age. Convertibles are now regarded as a separate asset class and as a vital part of the corporate treasurer's toolkit when it comes to financing. From an investment perspective, returns from convertible outright and hedge funds have been strong over a number of years.

Hedge Fund Strategies for the Asian Credit Markets

June 2004 | Suvir A. Mukhi , Income Partners Asset Management


We expect the positive macroeconomic background in Asia to persist in 2004. Our base case is for growth to pick-up in G3 economies (US, Euroland and Japan), leading to a coordinated global recovery. Asia will benefit from a pick-up in exports to these markets. Additionally, growing domestic demand and stronger inter-regional trade, driven by China, will add further impetus to growth. Thus we still expect the environment to be credit friendly in 2004.

Hedge Fund Opportunities in Germany

June 2004 | Achim Pütz, SJ Berwin Knopf Tulloch Steininger, Munich


With a new German Investment Act and Investment Tax Act in force since 1 January 2004, a wide variety of new business opportunities have opened up in the German hedge fund sector for foreign players. In fact, the new legislation not only provides a sound legal framework for hedge funds in Germany, it also creates a more level playing field between domestic and foreign players in the asset management business. The focus of this article is on the distribution of foreign hedge funds in Germany. Of course, foreign sponsors can also set up a hedge fund in Germany. However, the benefits of doing so are not obvious since the new legislation aims notto discriminate against foreign funds.

Eurekahedge Opens Asia's First Hedge Fund Hotel

May 2004 | Eurekahedge


Eurekahedge, Asia’s leading hedge fund consultancy, has opened Asia’s first hedge fund hotel. The hedge fund hotel compliments Eurekahedge’s existing start-up consultancy services by providing additional support for new hedge fund tenants including technical support, administrative support, premises, marketing and incubation.

Long/Short Equity Hedge Funds - Strategy Outline

May 2004 | Jeff Levy, Free Spirit Advisors


In principle, it all sounds easy enough. You've had a number of years in the business of traditional "long only" fund management. You've honed your ability to pick winners from the crowded, noisy universe of stocks, and you're feeling constrained by your inability to short the losers, and also by that ubiquitous foil to performance - the Index. So you decide to take that brave leap from the "relative" to the "absolute" space. This is a place where freedom and creativity reign supreme. Congratulations, you've just left the frying pan. Hopefully you aren't entering the blast furnace.

Multi-Strategy Hedge Funds - Strategy Outline

May 2004 | Eric Starr, Starr Capital Management


The investment objective of multi-strategy hedge funds is to deliver consistently positive returns regardless of the directional movement in equity, interest rate or currency markets. In general, the risk profile of the multi-strategy classification is significantly lower than equity market risk. By definition, multi-strategy funds engage in a variety of investment strategies. The diversification benefits help to smooth returns, reduce volatility and decrease asset-class and single-strategy risks. Strategies adopted in a multi-strategy fund may include, but are not limited to, convertible bond arbitrage, equity long/short, statistical arbitrage and merger arbitrage.

Relative Value Hedge Funds - Strategy Outline

May 2004 | Guy Cihi, AGS Capital


The Japanese stock market has been non-directional and unstable for more than ten years and fully reflects the ailing Japanese economy. Looking around the world, it is hard to find any traditional financial products profiting steadily under this situation. What is an investor to do? Pair-trading is a relative value investment strategy that seeks to minimise market risk and take advantage during such unstable times.

Event-driven Hedge Funds - Strategy Outline

May 2004 | Paul Leary, Centaurus Capital


An event-driven investment manager is typically looking to invest in situations where there is some form of corporate activity or catalytic change taking place. Corporate activity can include mergers and takeovers, restructuring, reorganisations, spin-offs, asset sales, liquidations, bankruptcy and many others.

Karsten, Jones and the Origin of Hedge Funds

May 2004 | Christopher Dennistoun


The reputation of Alfred Winslow Jones is unassailable. As a prophet and seer he rests loftily in the hedge fund holy of holies. Coiner of the theory, then in practice he turned $100,000 in 1949 into many millions in the mid 1960s. So far there has been no need to cast a shadow on his achievement or to doubt his role as the first mover. Every article, every book enjoys a prevailing conceit, a half truth enshrined in myth, that he was responsible for conceiving the idea of hedge funds.

Interview with Kenneth Hung, Fund Manager with Winnington Capital

April 2004 | Eurekahedge


Kenneth Hung is the fund manager for the Trophy Fund, a long/short equities pan-Asian hedge fund. The fund returned almost 300% in 2003 and has posted an annualised return of 57% since inception in September 2001. They currently have US$8 million in the Trophy Fund and US$10 million in a separate managed account.

Interview with Robert Drake of Asymmetric Capital Management

April 2004 | Eurekahedge


Robert Drake has been involved with the Asymmetric Convertible Fund since its inception in May 2002. The other members of the investment team are David Moore and Mark Gretton.

Hedge Fund Interview with Rose Choy, Senior Investment Analyst with PCI Investment Management Limited

April 2004 | Eurekahedge


Rose Choy, who is currently managing the PCIIM Emerging Markets Bond Fund, has five years of experience in the fixed income field. Prior to PCIIM, Choy's past experience was in the high yield and distressed debt fields at Citigroup in New York and with Carl Marks, a distressed debt fund based in New York.

The Role of Technology in Hedge Fund Investing

April 2004 | Meredith Jones, Strategic Financial Solutions


Technology has proven to be a boon to hedge fund managers and investors alike over the past seven years. What was once an arduous search and investment process primarily performed in person and through word of mouth has become a seamless process almost entirely managed from the comforts of your office. Indeed, the introduction and proliferation of hedge fund database and analysis platforms, web sites, web meetings and teleconferencing, the process of marketing, finding, analysing and monitoring hedge funds has perhaps never been easier.

The Benefits of Master-Feeder Fund Structures for Asian-based Hedge Fund Managers

April 2004 | Effie Vasilopoulos & Katherine Abrat, Sidley Austin Brown & Wood (Hong Kong)


The recent rapid growth of the hedge fund industry in Asia has prompted an increasing number of Asian-based hedge fund managers to explore other options for structuring their funds that will afford tax efficient access to the U.S. and European capital markets. Establishing a new fund, or restructuring an existing offshore fund to incorporate a master-feeder structure, is one way in which this objective can be achieved.

Fund Interview with Michael Clancy, Portfolio Manager/CEO, Elgin European Corporate Credit Fund

March 2004 | Eurekahedge


Mike Clancy is the co-founder of Elgin Capital LLP. He has 15 years’ credit and derivative experience in New York and London, and was most recently global co-head of credit trading at Merril Lynch.

Regulation of Asian Hedge Funds

March 2004 | Eurekahedge


The U.S. House of Representatives (lower house) passed late last year House Resolution 2420 (Mutual Funds Integrity and Fee Transparency Act) which would require a study on soft dollars and ban managers from jointly running mutual and hedge funds. A similar bill, Senate 1971 (Mutual Fund Investor Confidence Restoration Act), has been introduced in the U.S. Senate (upper house). The Senate bill would also ban the joint management of mutual and hedge funds. Besides the management ban and soft dollar regulation, both bills are more focused on the mutual fund industry than regulating hedge funds.

Providing Services to the Alternative Investment Community: the Evolution of the 'One Stop Shop' Concept

March 2004 | Joost Löbler, Global Director of Sales, Fortis Prime Fund Solutions


Choosing the right hedge fund administrator is one of the most important decisions that an investment manager can make and failure to do so could be costly to a fund. The administrator plays an invaluable role and will generally provide investment accounting and valuations, shareholder services, corporate secretarial services, domiciliary compliance, and assistance in the preparation of financial statements. A good administrator can remove all administrative headaches allowing the investment manager to focus on its trading activities. It is important to note that time spent on choosing the right administrator may save time in the long run.

Investing in Japan-Focused Hedge Funds

March 2004 | Neale Safaty, CIO, KBC alpha Asset Management


London-based KBC alpha Asset management is the specialist Japan and Asia regional focused fund of funds division of KBC Alternative Investment Management, an arm of KBC Bank & Insurance Holding NV, one of Belgium's leading financial institutions. Neale Safaty, KBC alpha's CIO, has over twenty years experience in the Japanese and Asian capital markets.

2004 Overview: Key Trends in Asian Hedge Funds

February 2004 | Eurekahedge


The Asian hedge fund industry is coming of age, with funds having had a stellar year in 2003; the Asian hedge fund index was up by 27% and assets under management rose about 75%. From inception in the late 1980s, growth was relatively pedestrian for most of the first decade. The late 1990s saw a marked change with a rapid acceleration of growth in the number of funds and assets, albeit from a low base.

Hedge Fund Interview with Takeshi Fujimaki and Yo Nakagawa, Fund Managers of Fujimaki Japan-Macro Fund

February 2004 | Eurekahedge


The FUJIMAKI JAPAN Macro fund is a Japan focused macro strategy fund. FUJIMAKI JAPAN Co., Ltd. is the investment advisor to the fund.

Fund Interview with Kazuyuki Murai, Fund Manager of Plaza Japanese Equity Long Short Fund

February 2004 | Eurekahedge


The Plaza Japanese Equity Long Short Fund is a long/short equities fund that uses a quantitative alpha model to capture opportunities across a broad universe in the Japanese equity market. Eurekahedge interviews its fund manager, Kazuyuki Murai.

Interview with Jessica McCarroll, co-founder of Lynx Arbitrage Volatility Arbitrage Fund

February 2004 | Eurekahedge


Lynx Arbitrage is an Asia Pacific, relative value volatility arbitrage fund with a stated focus of delivering optimal, consistent "risk-adjusted" investment returns uncorrelated to general market movements and trends by exploiting pricing anomalies between Asian Pacific stocks and related exchange traded derivative contracts.

Fund of Hedge Funds Interview with Charles E. Abrecht, founding partner of Alternatrend fund

February 2004 | Eurekahedge


The Alternatrend Fund is a long/short fund of hedge funds which invests in superior managers worldwide. The fund aims to outperform the MSCI World Index signifiantly over the long-term with lower volatility. Charles E. Abrecht, its founding partner shares with Eurekahedge the spectacular performances recorded by the fund.

Hedge Fund Interview with Paul Mulvaney, Principal of Mulvaney Capital Management

February 2004 | Eurekahedge


Mulvaney Capital Management is a London-based commodity trading advisor, regulated by the FSA in the UK and the CFTC in the US. The program is a long horizon systematic trend-capturing program allocating capital in all major sectors of the financial and commodity markets, explained by its Principal Paul Mulvaney, in an interview given to Eurekahedge.

Critical Mass

February 2004 | Jame DiBiasio, Editor, AsianInvestor


The Asian hedge fund world has gone from cottage industry to a rapidly maturing, must-have sector for global allocators. The Asia hedge fund industry is integrating globally. Investors are putting money not just with Asia strategies based in New York and London, but with managers based in the Asia-Pacific region.

Interview with Orion Constellation Partners LLC Fund of Funds

January 2004 | Eurekahedge


Orion Capital Management are an investment advisory company and fund of funds manager. Eurekahedge talks to Peter Rup, the Fund Manager for the Orion Constellation Partners LLC Fund.

Hedge Funds - A European Perspective

January 2004 | Christopher Hilditch and Nick Fagge, Schulte Roth & Zabel International LLP


There has been tremendous growth in the European hedge fund arena over the last decade and the majority of indicators point towards continued rapid growth in this market. European managers have demonstrated the ability to raise significant amounts of money both in Europe and elsewhere, including the U.S. Although London is, and is likely to remain, the European "capital" for hedge fund managers, fund managers are now to be found throughout the continent in France, Germany, Italy and Scandinavia amongst others. Several European domiciles now provide a framework for "onshore" hedge fund vehicles and European regulators are now looking more closely at hedge funds and the regulatory issues to which they give rise.

Hedge Fund Investment in Japan

January 2004 | Ted Uemae, Alternative Investment Products


The total assets invested in hedge funds by Japanese investors at the end of 2002 is estimated to be around US$20.5 billion, which is slightly over 3% of the global investment in hedge funds.

Gold Market Strategies: Hedging the Unthinkable

December 2003 | David Crichten-Watt, Phoenix Gold Fund


Whenever the Bundesbank was asked its position with regard to possible sales of bullion from its foreign reserves, the traditional answer was that the bank would never sell its gold reserves because those were the only assets it held that were not another party's liability. It is certainly this factor that has caused gold to be the principal store of value throughout documented history by almost every civilisation on our planet. Of course it has been decried as a "barbarian relic" and it is true that, in normal times, it is an asset that is worse than useless, for not only does it offer no annual return but, on the contrary, an investor will have to pay to have it stored safe from the hands of thieves or confiscatory governments.

Special Commentary: "If it ain't hard it ain't right"*

December 2003 | Mari Kooi, Wolf International


This quarter's special market commentary begins with a quote from one of the market's most successful hedge fund managers. The quote implies that only hard decisions, or those decisions that are not obvious, create excess alpha. The topic of this quarter's piranha soup is equities and the decisions in that space are not obvious. The recovery period is behind us and as we move into the cycle of monetary based speculation, the decisions get harder.

Hedge Funds - Hong Kong Legal Perspective

December 2003 | James Walker / Mark Shipman, Clifford Chance


This article explains the types of investment vehicles most commonly used for establishing hedge funds and sets out the possible regulatory requirements imposed on hedge fund managers/investment advisers under the Securities and Futures Ordinance ("SFO"). The article assumes that the hedge funds will not be marketed or offered "to the public" in Hong Kong and therefore will not need to be authorised by the Securities and Futures Commission ("SFC"), nor comply with the SFC Hedge Fund Guidelines, which regulates the "public" offering of hedge funds in Hong Kong.

Making Covariance-Based Portfolio Risk Models Sensitive to the Rate at which Markets Reflect New Information

December 2003 | Dan diBartolomeo, Northfield Information Services Inc and Sandy Warrick, CFA, Northeastern University


Abstract Multiple factor models of security covariance have been widely adopted by investment practitioners as a means to forecast the volatility of portfolios. In that such models arise from the tradition of Markowitz’s Modern Portfolio Theory, they have generally been based on a single period assumption, where future risk levels are presumed to not vary over time. In reality, risk levels do vary substantially and modifications of the underlying assumptions of multiple factor covariance models must change to reflect this fact.

Hedge Fund Accountancy in Japan

November 2003 | Michael Cole, PricewaterhouseCoopers


Benjamin Franklin once said "in this world nothing is certain but death and taxes." Unfortunately in recent times in Japan no longer can it be said that taxation is certain. There have been developments in the tax arena over the past couple of years that cause hedge fund managers much concern. This article discusses two of those developments.

Irish Fund Legislation

November 2003 | Brian Dillon, Dillon Eustace


Introduction Ireland has been an increasingly popular domicile for Japanese, Asian and other fund promoters for a number of years. Ireland, being an EU and OECD member country, has earned a reputation as a strong yet flexibly-regulated jurisdiction which meets the standards of selection of foreign investment funds securities under the relevant Japanese regulations (as well as being a recognised jurisdiction in Hong Kong and other countries).

Hedge funds in Cayman and the BVI

November 2003 | Nick Rogers, Walkers, Hong Kong


The last three years have seen extreme volatility in the global equity markets. Despite this volatility - or perhaps because of it - the offshore hedge fund industry continues to thrive. As investment managers have adjusted their strategies away from the traditional long/short model, they have found a willing pool of investors looking to diversify bruised portfolios with alternative investments.

John Knox provides some insight to the running of an Asian-focused fund of hedge fund

November 2003 | Eurekahedge


KGR Capital is a new entrant in the Fund of Funds world, and one of the few to specialise in Asian hedge funds. Eurekahedge talks to one of the principals, John Knox.

Hedge Fund Interview Arcus Japan Value Fund

November 2003 | Eurekahedge


The Arcus team, consisting of Robert Macrae, Peter Tasker and Mark Pearson, discuss their latest product with Eurekahedge.

Hedge Funds in the Cayman Islands

October 2003 | Spencer J. Privett, Maples and Calder Asia, Hong Kong


The Cayman Islands make up the world's fifth largest financial centre. There are approximately 580 licensed banks and trust companies in the Cayman Islands with assets of around US$747.6 billion. 47 of the world's 50 leading banks have a presence in the Cayman Islands.

Structured Hedge Fund Products

October 2003 | Fabien Labouret, Structured Alternative Investments Asia, and Yukihiro Nishimura, Structured Alternative Investments-Marketing Japan


The hedge fund industry and alternative investments in general, are often described as one of the only dynamic and uncorrelated asset classes able to generate consistent returns even in vicious volatile and bear markets. In contrast with other traditional funds, they are commonly accepted, a fact with which few would argue. With such reputation, gained by showing a consistent positive track record over a long period, the industry has expanded over the past years in a context of fewer investment restrictions being imposed by investors on money managers.

Interview with James Parker, Senior Portfolio Manager, ABN AMRO

October 2003 | Eurekahedge


Interview with James Parker, Senior Portfolio Manager, ABN AMRO

Interview with Jerry Wang, Fund Manager of the Vision Asia Maximus Fund

October 2003 | Eurekahedge


Interview with Jerry Wang, Fund Manager of the Vision Asia Maximus Fund

Hedge Fund Analysis - A Glance into the Black Box

September 2003 | Dr. Lothar Rupff, Quantitative Analyst, HVB Alternative Advisors Inc., New York


The target of this analysis- based on the example of one hedge fund strategy- is to show which market factors (eg, equity and bond indices and their volatilities) explain the return of hedge funds and which modeling types are necessary to guarantee a high quality explanation. Empirical methods, eg, classical linear regression, extended models also include autocorrelation (dependency on residuals) and heteroscedasticity (non- constant volatility of residuals over a period of time), it is used to investigate which variables (factors) are relevant for explaining hedge fund returns and to determine the quality of the model. The results show that strategies which can be significantly more complex within the hedge fund business than in traditional asset management can be described with only a few significant market factors.

Why Indexation can be a Dangerous Strategy

September 2003 | Harry M. Kat, Professor of Risk Management, City University, London


In this brief note we argue that for investors that are serious about matching (the risks of) assets and liabilities, straightforward indexation is a doubtful proposition as significant autonomous changes may occur in the industry allocation and accompanying risk-return profile of the portfolio underlying the index. The name of the index may stay unchanged, but the underlying portfolio does not!

Trends in European Hedge Funds

September 2003 | Eurekahedge


The first edition of the Eurekahedge European Hedge Fund Directory contains information on more than 500 single manager hedge funds that conform to the arbitrary definition of either: The manager physically located in Europe (irrespective of geographic execution of strategy); Or the manager is physically located outside of Europe but the strategy is executed in Europe

ABN Amro Interview with Alexander Mearns, Chief Operating Officer and Head of Product Development at Eurekahedge Pte Ltd

September 2003 | Eurekahedge


We recently sat down with the Chief Operating Officer and Head of Product Development at Eurekahedge Pte Ltd. In addition to running the operational side of Eurekahedge, Alexander Mearns is the resident statistician for the group and developed the ABN AMRO Eurekahedge indices in 2002. Prior to working for Eurekahedge, Alex was a business analyst for Fleming Asset Management in London and has also worked for the British Government as an Analyst with the DTI. Alex holds a BSc (Hons) in Mathematics & Statistics and has lived in Asia since early 2001.

Fixed Income Hedge Fund Strategies

August 2003 | Steve Howell, Joint Founder and CIO, Basis Capital


The management of Fixed Income Securities as an asset class has been transformed by traders and risk managers that have typically migrated from investment banks to launch and manage hedge funds. In so doing they bring product, portfolio and risk management skills that lie outside the boundaries of traditional fund management and make it difficult for traditional managers to compete in the a changing environment. These hedge funds bring investors an absolute return focus, whilst utilizing the full 'toolkit' of fixed income and derivative products to extract relative value and maximise arbitrage opportunities.

Convertible Bond Arbitrage

July 2003 | George Long, Partner, LIM Advisors


The goal of convertible bond arbitrage is to consistently make money regardless of market conditions and to do so with minimal volatility. The basic mechanics of this market neutral approach is to take simultaneous long and short positions in a convertible bond and its underlying stock. By having the appropriate hedge between long and short positions, the arbitrageur hopes to profit whether the market goes up or down. Despite a focus on absolute returns rather than beating market indices, convertible bond arbitrage strategies have outdone the S&P 500 index with significantly lower volatility over the past decade.

Hedge Funds in Asia

July 2003 | Peter Douglas, Principal, GFIA Pte Ltd


Asia's core attraction to global allocators is that there are some world class managers who typically still have capacity. Allocating to a hedge fund manager is the result of a search for talent allied with capacity, and this is no different in Asia. But global allocators looking to managers in Asia will find some different characteristics, some driven by the youth of the industry, some by the nature of the underlying capital markets, and some cultural.

Interview with Neale Safaty, fund manager of the KBC Japan Fund of Funds

July 2003 | Eurekahedge


KBC Alpha Asset Management is the Fund of Funds division of KBC Alternative Investment Management. The two key principals, Neale Safaty and David Walter have 20 and 17 years expertise in Japan & Asian equity and equity-linked capital markets that includes broking, risk-management, trading and direct experience in setting up and running Asian hedge funds.

Marketing for Hedge Funds and Funds of Funds

June 2003 | Pertrac


With an estimated 4,100 unique single manager hedge funds and more than 1,200 funds of funds, the atmosphere for raising capital perhaps has never been so competitive. Banned from advertising by the Securities and Exchange Commission, emerging hedge funds and funds of funds must find other avenues for acquiring assets. Luckily, there are four strong avenues for smaller funds to find investors: commercial and proprietary databases, industry publications, internal or third party marketing agents and word of mouth. With the proper preparation, hedge funds and funds of funds can take advantage of these capital-raising opportunities and steadily grow their assets under management.

Eurekahedge European Hedge Fund Directory

June 2003 | Eurekahedge


"Transparency comes to Europe" Eurekahedge are proud to announce the launch of our European Hedge Fund Directory. Our European Hedge Fund Directory will incorporate all of the key features of our flagship Asian Hedge Fund Directory, including:

Interview with Ophelia Tong, manager of the HT Asian Catalyst Fund

June 2003 | Eurekahedge


HT Capital was established in 1997 and is owned by Ophelia Tong and Karl Hurst. Tong is the fund manager and has been running it since January 1999. The HT Asian Catalyst Fund is the only fund that HT Capital runs. HT Asian Catalyst Fund is an Asia excluding Japan, long/short equity hedge fund. Stock selection is described as based on fundamental valuation grounds with technicals being used for market timing. Company visits are extensive and important. The Fund currently has USD34.7 million in assets and is +0.42% ytd as of May 01 2003.

Hedge Fund Risk Management: Investor Concerns - Management Summary

May 2003 | Evelyn Cronin


This report focuses on hedge fund investors concerns with risk. It examines: who the respondents are, how much money they represent, how they select hedge funds, what their perceptions of the risk are, what disclosures they require, how they measure risk and performance and why they'd exit a fund.

Risks and Portfolio Decisions Involving Hedge Funds

May 2003 | Dr Narayan Naik, London Business School's Centre for Hedge Fund Research


Dr Narayan Naik is Director of London Business School's Centre for Hedge Fund Research and Education. The Centre is intended to become the leading academic authority and focal point for new ideas on Hedge Funds in Europe. Specifically, it will focus on areas of research relevant to gaining a better understanding of the strategies employed by hedge funds.

Data Collection and Analysis for Fund of Funds Managers

May 2003 | Strategic Financial Solutions


Central to the success of any multi-fund portfolio is identifying and evaluating the hedge fund managers (HFs) to be ultimately included in the portfolio. With estimates as high as 10,000 HFs to choose from, this process can be overwhelming. The job is further complicated by the wide range of HF investment strategies, minimum investments, fee structures, leverage factors, capacity constraints, etc. It is really no wonder that many individual and institutional investors consider funds of funds (FOFs) rather than embark on this process alone.

Interview with Nick Delf, Managing Director of Maestro Capital Management

May 2003 | Eurekahedge


Nick Delf is managing director of Singapore-based Maestro Capital Management, which is advisor to the Global Maestro Fund 1 Ltd, a Caymans based Macro fund. The fund will trade in a highly diversified set of markets across all asset classes and targets returns of around 20% and an annualised standard deviation of 10%. The fund is in the final stages of initial asset gathering and expects to launch in May.

USA PATRIOT Act Rules to Hit Offshore Hedge Funds

April 2003 | By James Shipton, Managing Director ComplianceAsia Consulting Pte. Ltd.


Introduction The U.S. Treasury has recently given notice of a proposed set of new rules, to be promulgated under the Banking Secrecy Act, that will directly and very shortly affect many offshore hedge funds. The new rules form a part of the new USA PATRIOT Act regulatory regime and are intended to promote the prevention, detection and prosecution of international money laundering connected with terrorism. They will require "financial institutions" (which will, practically speaking, include many offshore hedge funds - see below) to make a short filing with the U.S. Treasury containing basic information about the fund and its manager. In addition the rules will require an offshore fund to adopt an anti-money laundering program that, at a minimum, includes: (i) the development of internal policies, procedures and controls; (ii) the designation of an internal compliance officer; (iii) ongoing employee anti-money laundering training; and (iv) an independent review to test the sufficiency

Hedge Fund Registration in Hong Kong Proving Difficult

April 2003 | Ray Heath


Serious differences are emerging between Hong Kong's markets watchdog and hedge fund managers queuing up to have their products authorised for retail sale. After winning plaudits for breaking new ground in international financial markets by allowing hedge funds to be offered to the public, the Securities and Futures Commission is now being criticised for putting obstacles in the way of new players.

Australian Hedge Fund Industry: Is the growth sustainable in 2003?

March 2003 | Derek Sicklen, Vice President Alternative Asset Management, JP Morgan


The hedge fund industry in Australia has experienced significant growth over the past year, with some estimates placing funds under management increasing from around US $0.7 billion in 2001 to US $1.1 billion in 2002. It is likely that these estimates are on the conservative side. The reasons for this growth are both demand and supply driven, with an increasing appetite among institutional investors for alternative investments, the entry of new players (both local and foreign), as well as the existence of substantial domestic retail demand. Looking ahead, will all the above drivers continue to foster such growth in the industry and are there any other factors which are likely to impact assets managed in hedge funds in 2003?

The Dilemma over a Manager's Departure

March 2003 | Ray Heath


Hedge fund managers moving on can be a hazard for investors, but what should they do if the person to whom they entrusted their cash suddenly leaves? This is very much a caveat emptor market, and hedge fund managers can be a restless bunch. Like nomads they seek greener grazing grounds. For the vast majority of hedge fund investors, the light regulations on this largely private business mean there is little comfort to be had from the official watchdogs.

Interview with Albert Saporta, Manager of the SOGAsia Fund

March 2003 | Eurekahedge


Albert Saporta is AIM&R's founding partner and has 17 years' experience in global financial markets. The Firm has a team of 5 professionals with offices in Geneva and San Francisco. Before starting AIM&R, Mr. Saporta worked for IFM, UBS Securities, Merrill Lynch and Paribas. He currently runs two hedge funds, the SOG Fund (global multi-strategy arbitrage) and SOGAsia. The SOGAsia fund is an Asia including Japan, multi-strategy arbitrage fund. It employs structure arbitrage, closed-end fund arbitrage, pair trading, merger arbitrage and event driven strategies. The SOGAsia Fund was launched in July 2002 and was +1.4% for 2002. Mr. Saporta is based in Geneva.

Interview with Ho Tian Yee, Pacific Asset Management

February 2003 | Eurekahedge


Ho Tian Yee is the CIO and oversees all investment management decisions at Pacific Asset Management. He is assisted in this by a four person investment team. Pacific Asset Management Ltd was founded in Singapore in 1995 by Ho, the major shareholder. Ho and his partners own 89% of the equity, with the balance held by Pacific Investment Management Company of the US. Prior to establishing the company, Ho worked for Bankers Trust in Singapore where he was employed for 19 years.

The Current Environment for Marketing Hedge Funds in Europe

November 2002 | Eurekahedge


Perhaps the most surprising thing about the nature of the hedge fund market in Europe is its lack of concentration. This is partly because it is made up of a variety of distinct buying groups (fund-of-funds, family offices, financial institutions, private banks, etc) and partly due to the sheer number of participants. In the long-only equity industry perhaps 90% of the money is managed by the top eight big global names. In the alternatives sector, we estimate that in London alone there are up to 200 individual organisations with an interest in Asia hedge funds. Geneva has a similar number of hedge fund investors; and then there are Zurich, Paris and the other capital cities of Europe.

Interview with APS Asia Pacific Hedge Fund

November 2002 | Matt Schmidt, Eurekahedge


Reflections on 2002 and Prospects for the Coming Year Wong Kok Hoi is the Managing Director and Chief Investment Officer of APS Asset Management based in Singapore. He has been the lead manager of the APS Asia Pacific Hedge Fund since its launch in April 2002. Prior to establishing APS, Mr. Wong was employed by Citibank and the GIC in Singapore. He has 20 years of investment experience. The APS Asia Pacific Hedge Fund is an Asia including Japan, equity long/short fund. It was up 20.26% for the year 2002.

Interview with Peter Douglas of Investor Select Advisors

November 2002 | Matt Schmidt, Eurekahedge


The State of Hedge Fund and Fund of Funds Industries Investor Select Advisors www.investorselectadvisors.com is a fund of hedge funds advisor, managing assets in 9 multi-manager portfolios primarily on behalf of institutional investors and distributors. It has in excess of US$340 million in assets under management, allocated to 57 hedge funds globally and over a dozen in the Asian time zone. Its 15 staff members include a research team of 6; 3 are located in Asia.

Recent Trends in Offshore Hedge Fund Due Diligence Practice - More Diligent Due Diligence

October 2002 | James Shipton, Director of Advisory Services, Eurekahedge


There is a sea-change occurring in the way investors are considering potential hedge fund investments. No longer are investors satisfying themselves with a rudimentary review of a fund prior to an investment. Now best practice dictates that detailed due diligence must occur prior to, and on-going monitoring must occur following, any investment. It is now recognised that the level of due diligence applied to hedge funds should be of a standard similar to that usually applied to private M&A transactions, particularly those undertaken by private equity firms. The reason why this 'sea-change' has occurred is down to a combination of macro as well as or hedge fund-specific factors.

Hong Kong - Taxation of Hedge Funds

October 2002 | Ray Heath, SCMP


Hong Kong wants more fund managers. It's in danger of having fewer if the threat of taxation now hanging over the industry is not removed soon. Threats of an exodus to Singapore, Hong Kong's traditional arch-rival in the battle to attract funds; have been bandied around as the Inland Revenue continues to circle the industry. Anxious managers have banded together, backed by the Alternative Investment Managers' Association in a bid to persuade the government to call the tax-man off the industry.

Hong Kong - Hedge Funds for the Retail Market

October 2002 | Eurekahedge


On the 28th of November the Hong Kong Securities and Futures Commission authorised the first retail alternative investment funds for the Hong Kong market. Two single-strategy hedge funds from JF Asset Management and one fund of funds from the HSBC stable of products have been approved by the regulators for sale to retail investors.

Broking Effectively to Hedge Funds

October 2002 | John Hetherington, Eurekahedge


The emergence of the hedge fund sales desk among the region's stockbrokers raises questions that are not answered merely by embossing Hedge Fund Sales on someone's business card, even if that individual is intimately aware of how hedge funds operate. I have been examining these questions recently while building a hedge fund training business, tapping into my ongoing conversations with hedge fund managers themselves and memories of life as a sell-side equity analyst.

Australia: Legal Issues relating to Superannuation Trustees as HF Investors

September 2002 | Tessa Hoser (Senior Associate) & Katherine, Henzell (Graduate Lawyer) - Blake Dawson, Waldron (Sydney)


The Australian hedge fund market has undergone significant expansion in recent years and is now receiving fund allocations by the trustees of superannuation funds, the Australian equivalent of a retirement or pension fund. These superannuation funds are established as trusts. There are therefore a range of legal issues that superannuation trustees need to address in order to fulfil their obligations to fund members when investing in less traditional assets such as hedge funds.

Latest Trends in Asian Hedge Funds

September 2002 | Matt Schmidt, Eurekahedge


The Asian hedge fund industry is still in its infancy, but the last twelve months have been a period of hectic growth. We expect dedicated Asian hedge fund assets to grow by 40% this year from US$14 billion to US$20 billion. The increase will comprise an estimated US$5 billion of net new money and US$1 billion through performance. In addition, we estimate that managers have a further US$4 to 5 billion of hedged strategy assets in managed accounts. The number of funds is likely to increase from 160 in January 2002 to 250 by the year-end.

Trends in the Fund of Funds Market in Asia

September 2002 | Matt Schmidt, Eurekahedge


Major market characteristics of the fund of funds market in Asia are: It has only been in existence for a couple of years and it is still very much in its infancy both in absolute terms and in comparison to the market in the US. The number of players in it and its overall size are set to increase dramatically. There are few barriers to entry. There are currently no dominant players. It is opaque.

Cost/Benefit of Investing in Funds of Funds

September 2002 | Matt Schmidt, Eurekahedge


The fund of funds industry has grown exponentially since the first fund, Leveraged Capital Holdings, was launched in 1969. There are currently estimated to be between 1,200 to 1,500 funds of funds globally, most of which were launched in the past decade. The first Asia-specific fund of funds was launched in 1993; it is called Asian Capital Holdings and run by the same group (LCF Rothschild Asset Management) that manages Leveraged Capital Holdings. There now appear to be between 30 and 35 Asia/Japan-exclusive funds of funds. However, most of these new funds of funds have assets below US $100m.

The Retail Market for Hedge Funds in Asia

August 2002 | Stewart Aldcroft


The following article takes a look at who is buying hedge funds in Asia. The intention is to give an outline of the market, and to show where there are opportunities for those in the hedge fund business to sell their product. However, a major issue all purveyors should be alert to, is whether they have the selling skills necessary to succeed.

USA PATRIOT Act Rules to Hit Offshore Hedge Funds

August 2002 | James Shipton, Director of Advisory Services, EurekaHedge


The U.S. Treasury has recently given notice of a proposed set of new rules, to be promulgated under the Banking Secrecy Act, that will directly and very shortly affect most offshore hedge funds. The new rules form a part of the new USA PATRIOT Act regulatory regime and are intended to promote the prevention, detection and prosecution of international money laundering connected with terrorism. They will require "financial institutions" (which will, practically speaking, include a great number of offshore hedge funds - see below) to make a short filing with the U.S. Treasury which is to contain basic information about the fund and its manager. In addition the rules will require an offshore fund to adopt an anti-money laundering program that, at a minimum, includes: (i) the development of internal policies, procedures and controls; (ii) the designation of an internal compliance officer; (iii) ongoing employee anti-money laundering training; and (iv) an independent review test the sufficie

Interview with Woon Lim, Fund Manager of Bali Pacific Fund (Cayman)

August 2002 | Matt Schmidt, Eurekahedge


Woon Lim manages the Bali Pacific Fund (Cayman) from New York with Thomas Murtha. Woon Lim, an ex-broker, spent 11 years with Robert Fleming and four with HSBC Securities on their Asian sales desks in New York. The fund was launched at the start of January 2002. The Bali Pacific Fund was 0.5% for August 2002 and is 1.0% YTD at the end of August.

Interview with David Lee, Fund Manager of Ferrell Asia Fund

August 2002 | Matt Schmidt, Eurekahedge


David Lee runs the Ferrell Asia fund, managed by Ferrell Asset Management Pte Ltd, which was established in Singapore in 1999. David Lee is the MD and CIO. He has more than 15 years' investment experience, having previously headed Fraser Asset Management. The company has US$25m under management, all of which is managed on an absolute return basis. The Ferrell Asia Fund has US$5m of assets. The Ferrell Asia fund was 0.1% for August 2002 and is 3.4% YTD at the end of August.

Hedge Funds - Their Contribution to Securities Markets

July 2002 | Matthew Harrison, Hong Kong Exchanges and Clearing Ltd


In the third quarter of 2002, it is expected that Hong Kong retail investors will be permitted to buy hedge funds. Recognising increasing retail interest in alternative investment, Hong Kong's Securities and Futures Commission (SFC) has released guidelines for authorisation of retail hedge funds. This marks a recognition by the Hong Kong authorities of growing worldwide interest in the sector.

Proliferation of Hedge Fund Indices

July 2002 | Angela Pasceri


The MSCI Hedge Fund Indices launched in July of this year is one of many products in an already crowded market, but it claims to be superior to what's on offer despite its small but growing database of 750 funds. MSCI's family of hedge fund indices is an ambitious endeavour composed of 90 indices aimed at measuring all hedge fund strategies both open and closed in minute detail.

Short Selling - The Myth and the Madness

July 2002 | Ray Heath


Short selling on the world's equity market is under fire once more, and hedge funds have found themselves in the front line. The charges are simple: probably simplistic. Markets have taken some sudden downward lurches; shares fall when there are more buyers than sellers, so short selling must be exaggerating the size of the falls. Hedge funds are short sellers. Round up the usual suspects. The sniping has not been restricted to hedge funds, the proprietary trading desks of the big investment banks have also come under fire. Many of the attacks on equity long/short hedge funds have come from politicians whose constituents have seen their investments eroded by the falls in stock markets, and who want someone to blame.

Retail Hedge Fund Regulation Update

July 2002 | Ray Heath


The pace of Hong Kong's race to put hedge funds onto the retail market is slowing. Although a small, but still significant queue has formed to register products, some unexpected potholes have appeared as managers, lawyers and the regulators attempt to reconcile differing requirements. That there would be teething troubles was seen as inevitable, given the pioneering aspect of the Securities and Futures Commission's initiative in opening the way for hedge funds to be offered to the wider public. The SFC was having to set standards that would allow freedom of fund management while ensuring maximum investor protection. No precedent was available, as in other jurisdictions hedge funds remain exempt products, although Singapore has also taken steps to regulate the public offering of the vehicles.

NAVs - How Much Can You Trust Them?

June 2002 | Ray Heath


A growing concern for global markets watchdogs is the accuracy and timeliness of the net asset value (NAV) of hedge funds. The NAV is the ultimate bottom line of a fund, the keystone figure on which performance is based. If the system for setting NAV is not secure, then the fund's worth is suspect.

Asian Hedge Funds - First Half Yearly Report

June 2002 | Matt Schmidt, EurekaHedg


After the disastrous market conditions in 2000 and the first nine months of 2001 pushed Asian hedge funds down, the last quarter of 2001 proved a nice rebound for the industry. Managers made money throughout the region, from playing the falling yen in Japan (either outright US dollar long or purchasing exporters) and buying bank shares in Korea, to domestic plays in Southeast Asia and Hong Kong/China.

What is a Fund of Funds Worth?

May 2002 | Niall Shiner, Eurekahedge


Two recent transactions - Pioneer's purchase of Momentum and Man's acquisition of RMF - have highlighted the issue of valuations of fund of funds companies.

US$20bn and 250 Asian Hedge Funds Likely By Year End

May 2002 | Richard Armstrong, Eurekahedge


Asian hedge fund assets have grown from around US$14bn on 1 January to an estimated US$17bn at the half year point. Our analysis suggests new net inflows in excess of US$2bn with the balance of asset growth from capital appreciation. The ABN Amro Eureka Hedge Fund Index has grown some 7% to the end of May, suggesting approximately US$1bn of growth in existing invested assets.

Selling Hedge Funds to the General Public - Australia is Ahead of the Pack

April 2002 | John Hetherington, Eurekahedge


After no-doubt considerable soul-searching, Hong Kong's Securities and Futures Commission (SFC) finally published in early May the guidelines which it will follow in determining whether a hedge fund will be authorised for public sale. This determination came eleven months after the Monetary Authority of Singapore (MAS) released its own standards. While there are similarities, the hurdles set by the SFC are much higher.

Hedge Fund Location - it matters

April 2002 | John Hetherington, Eurekahedge


We asked 16 managers, based around the world and overseeing absolute return Asia Pacific strategies, their views of where is the best location to establish a hedge fund. We gave each of them the same 12 questions (reproduced below), which centered on the investment process and capital raising. Their answers were remarkably similar, suggesting that there may be a clear formula which new, and arguably some established, managers should follow.

The View from Berkeley Square - Asia's Back on the Radar Screen

March 2002 | Niall Shiner, Eurekahedge


It has become apparent in the last few months that Asian focused hedge funds are hot. Sitting in Asia, this is evidenced by the rate at which the more established funds are closing, and the facts that several new funds are being created every week and that a long queue of Asian fund of fund products is in the pipeline. What is not so evident are the underlying causes of this sea change.

Long-Only Houses Are Developing a Taste For Asian Hedge Funds

March 2002 | Niall Shiner, Eurekahedge


After no-doubt considerable soul-searching, Hong Kong's Securities and Futures Commission (SFC) finally published in early May the guidelines which it will follow in determining whether a hedge fund will be authorised for public sale. This determination came eleven months after the Monetary Authority of Singapore (MAS) released its own standards. While there are similarities, the hurdles set by the SFC are much higher.