Betting on the the best performance for 10 years?

It is not just about green shoots anymore…Hedge funds will likely deliver their best first-half performance in a decade, as investors renew their faith in the sector in the wake of last year’s disastrous losses. According to Hedge Fund Research (HFR), the Chicago-based research firm that compiles daily statistics on performance, Hedge funds worldwide returned 5.63 per cent to their investors in the year to last Thursday.

Strategies that forecast big directional market moves made profits of 12.52 per cent over the period as equity markets in Europe, the US and Asia-Pacific posted strong gains and liquidity gradually returned to the credit markets. Actually, confidence in hedge funds returned in a single day in March, when the US Government unveiled the second strand of its Trouble Asset Relief Program, said one hedge fund chief executive.

Toscafund, the West End fund run by former Commerzbank banker Mehmet Dalman, was most recently understood to have improved by more than 50 per cent since January.

According to HFR, energy hedge funds, convertible arbitrage and Asia investment funds have all posted strong gains this year. Besides, hedge fund investors lost an average of 18.9 per cent last year, as the sector plunged to its second annual loss and confidence in alternative asset management hit rock bottom.

HFR said that the total funds under management, which at its peak topped $2 trillion, decreased to below $1.5 trillion, as panic-stricken investors rushed to take back assets. In addition, Man Group, Brevan Howard, Lansdowne, Marshall Wace and CQS have announced their opposition to an EU draft policy on Alternative Investment Fund Managers, which they say is flawed and has been rushed through with little consultation.

The proposed directive, which has caused consternation across the industry, imposes severe new reporting requirements on funds and regulates them and their managers as never before.

with e-commerce journal

Jean Viry-Babel
senior partner
VBK partners

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