Hedge Funds See Record Growth In 2013

By ExpatBriefing.com Editorial 06 January, 2014

The global hedge fund industry saw its assets grow by USD228.8bn in 2013, the fastest annual growth on record, according to a report by investment funds research house Eurekahedge.

The Eurekahedge Hedge Fund Index was up 0.99 percent in December, bringing the yearly returns for 2013 to 8.02 percent. By comparison The MSCI World Index returned 1.67 percent in December and was up 21.1 percent for the year 2013.

Overall, hedge fund managers were up 2.53 percent in the first half and 5.36 percent in the second half of last year, despite suffering setbacks in June and August as uncertainty loomed in the underlying markets following the Fed's 'taper scare'.

Most regional mandates ended the year on a positive note, with Japan and Greater China-focused hedge funds outshining the rest with growth of 25.7 percent and 19.3 percent respectively.

Among investment strategies, distressed debt investing hedge funds were the best performers during the year, gaining 16.8 percent, with long/short equity and event driven strategies also delivering strong returns (up 14.3 percent and 11.3 percent, respectively).

In terms of capital raising, North American fund managers were the most successful, attracting USD73.6bn of asset inflows during the year, followed by European and Asia ex-Japan fund managers who saw capital allocations of USD62.4bn and USD11.0bn in 2013.

The Eurekahedge Fund of Funds Index was up 7.79 percent, marginally behind hedge funds as multi-managers posted their best performance since 2009.

Fund of hedge funds managers are now tracking hedge funds more closely than ever with multi-managers outperforming underlying hedge funds in 6 out of the 12 months this year. A combination of reduced fees, increased diversification and the weeding out of underperforming fund of funds has rendered the multi-manager model more agile than ever.

Tags: Investment | Investment Funds | Hedge Funds | China | Fees | Japan | Expats | Europe | North America |


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