Geneva-based hedge fund advisory firm, TARA Capital, have released the results of their latest Hedge Fund Strategy Barometer showing that th...

Geneva-based hedge fund advisory firm, TARA Capital, have released the results of their latest Hedge Fund Strategy Barometer showing that the biggest winner this quarter is the long/short equity sector, particularly those with a global mandate. This quarter’s HFSB also shows that investors are disheartened with managed futures and CTA strategies. “In a difficult year with few big trends investors appear to be favouring a move back to the two largest traditional hedge fund styles, global macro and directional long/short funds”, according to Cyril Delamare of TARA Capital. He added: “Historically we tend to experience strong equity markets in the last few months of the year. Clearly investors are hoping this pattern will hold and are therefore favouring the equity hedge space.” Following this pattern, dedicated Japanese equity funds also are very much in demand, and have been consistently popular over the history of the barometer. Now 59 per cent of investors are looking to increase their investments with no investors planning a reduction. The latest results confirm that hedge fund investors remain cautious about the direction of the fixed income markets with very few planning an increase to fixed income arbitrage this quarter. Convertible arbitrage, a strategy that has been unpopular for the last two years, had looked to be coming back into favour in the previous survey. However, interest seems to have dampened again with Mr Delamare commenting that “While some convertible arbitrage managers are arguing that the time to invest is now, investors are finding the sector too hard to call and are preferring to stay on the sidelines for the time being.” Multi-strategy remains a consistently popular style with 34 per cent of respondents planning to increase with no-one indicating that they will be reducing their allocations. Pure merger arbitrage funds also remain quite popular while investors continue to shun the distressed sector. The barometer’s findings are based upon the views of a diverse grouping of European-based hedge fund investors who together invest a total of $78 billion in the asset class.