The Eurekahedge Report - October 2018

October 2018 | Eurekahedge

The benchmark Eurekahedge Hedge Fund Index was down 0.06% in September, up 0.26% year-to-date. Total assets under management increased by US$1.1 billion during the month as the sector witnessed performance-based increase of US$5.2 billion while registering net asset outflows of US$4.1 billion. The total size of the industry now stands at US$2.45 trillion.

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.

How Investors Can Benefit from the Alternative-Beta Approach: A Practitioner’s Analysis SPONSORED POST

October 2018 | Alain Groshens, SystematicEdge

A key component of a robust systematic investment process to enhance risk adjusted returns.

A Strategic Comparison of Private Investment Fund Models

October 2018 | Julia D. Corelli and Irwin M. Latner, Pepper Hamilton LLP

In this article, we outline a number of private investment fund models, both traditional and nontraditional, that new or emerging fund managers may wish to consider in determining which model is right for their needs and those of their investor base. From deal-by-deal financings (aka independent sponsors), pledge funds, "committed" independent sponsors and single-investor funds to traditional private equity and hedge funds and permanent capital vehicles, there are a number of structure options for a manager to consider and explore. In many cases, emerging managers will be targeting family offices, high-net-worth investors, funds of funds and other investors who are accustomed to emerging-manager investing but reluctant to invest in a traditional committed capital fund with an unproven manager.

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.

CFIUS Reform: How Private Equity Funds Are Affected

October 2018 | Rod Hunter, Sylwia A. Lis and Karl Egbert, Baker McKenzie

With the signature of President Trump on August 13, 2018, the Foreign Investment Risk Review Modernization Act of 2018 (FIRRMA) became law. FIRRMA represents the most significant changes to the law governing the Committee on Foreign Investment in the United States (CFIUS or Committee) since the creation of the U.S. foreign investment regime in 1988. Although prompted primarily by national security concerns with Chinese investments, the legislation will affect investments by all non-U.S. investors, including investors in private equity and other funds. The changes reflect a trend across advanced markets for greater scrutiny of investments made via fund vehicles.

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