The Eurekahedge Report - August 2018

August 2018 | Eurekahedge

The benchmark Eurekahedge Hedge Fund Index was up 0.41% in July, up 0.43% year-to-date. Total assets under management increased by US$3.4 billion during the month as the sector witnessed performance-based increase of US$2.0 billion while registering net asset inflows of US$1.5 billion. The total size of the industry now stands at US$2.46 trillion.

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.

Blockchain Investment Funds - A Perspective from Cayman

August 2018 | Gaela R. Fitzgibbons, Higgs & Johnson Counsel & Attorneys at Law

In regard to the structure, set up and launch of innovative investment fund structures with specialization in investments in blockchain, ICO and cryptocurrency assets, this article includes a pragmatic list of fifty considerations and frequently asked questions for those interested in setting up a Cayman investment fund to invest into these asset classes.

Emerging Trends in Co-Investing Alongside Funds in Asia

August 2018 | Suzanne Gibson and Chi Ha, King & Wood Mallesons

Offering co-investment opportunities to certain fund investors is a key trend for fund sponsors in establishing alternative investment funds.

ILS Funds in Guernsey

August 2018 | Christopher Anderson, Carey Olsen

Guernsey has a thriving insurance linked securities (ILS) sector. As described in Carey Olsen's ILS briefing , Guernsey is home to an abundance of ILS structures

Offering Exemptions Available to Companies Issuing ICOs

August 2018 | Jennifer A. Connors, Josias N Dewey, Rebecca Leon and David P. Sofge, Holland & Knight LLP

Issuing an initial coin offering (ICO) is a new and innovative way for companies to infuse capital into their enterprise. However, several regulatory agencies have increased their scrutiny of ICOs, including the U.S. Securities and Exchange Commission (SEC).

The Financial Council: Consultation on the Wates Corporate Governance Principles for Large Private Companies

August 2018 | Andrew Collins and Amelly Kok, Charles Russell Speechlys LLP

On 13 June 2018, the Financial Reporting Council (FRC) published a consultation on corporate governance principles for large private companies (the Principles) and supporting guidance. The Principles are a voluntary set of corporate governance principles for large private companies developed by the Coalition Group, an industry group chaired by James Wates CBE (of family-business, Wates Group) and constituted by representatives from the FRC and various industry bodies including the British Private Equity & Venture Capital Association, the Confederation of British Industry, the Institute of Directors and the Trades Union Congress.

Turkish Treasury to Invest in Venture Capital Funds

August 2018 | Muhsin Keskin and Sait Baha Erol, Esin Attorney Partnership

The Council of Ministers' decision no. 2018/11662, published in the Official Gazette on 5 June 2018, paved the way for the Undersecretariat of Treasury ("Treasury") to invest in venture capital funds ("funds").

US Cross-Border Securities: Buyer (and Seller) Beware

August 2018 | Kenneth Juster, White & Case LLP

As technology removes physical borders from the securities industry, international financial institutions must remain vigilant to ensure their business activities do not violate US regulations.