Alt Investments
Distressed Strategy Hedge Funds Lead Performance Pack So Far In 2014 - Deutsche Bank
Hedge funds that make money via distressed securities make the largest returns in the year to June (6.7 per cent), according to a monthly snapshot of performance and themes in a sector coming to terms with new European Union rules.
Hedge funds that make money via distressed securities make the
largest returns in the year to June (6.7 per cent), according to
a monthly snapshot of performance and themes in a sector coming
to terms with new European Union rules.
Credit-related hedge funds also performed robustly in the year to
June (5.27 per cent), as did event-driven strategies (4.48 per
cent). The median fund in the emerging markets space delivered
returns of 2.27 per cent. Equity long/short and distressed funds
showed the biggest dispersion of returns in June, according to
Deutsche
Bank.
In terms of leverage, gross and net fundamental equity exposure
rose in June, ending at a ratio of 2.73, up 3.58 and 0.72 and up
4.01 per cent respectively.
After a decidedly shaky start for the early part of 2014, the
hedge fund sector has posted more robust results recently.
According to Hedge Fund Research, the Chicago-based tracker of
performance, total hedge fund capital rose to a record $2.7
trillion at the end of the first quarter of this year, later
rising to $2.8 trillion in the second quarter. The organisation’s
HFRI Fund Weighted Composite Index gained +1.3 per cent for the
month, led by equity hedge and event driven strategies, bringing
first-half performance for the broad based composite to +3.2 per
cent.
Among issues noted by Deutsche Bank is the arrival in full force
– after a transitional period – of the EU’s Alternative
Investment Fund Managers Directive, which seeks to bolster
investment protection and reduce potential risks to the financial
system from hedge funds and other “alternative” investments.
Separately, the UK Financial Conduct Authority, the regulator,
has announced tougher requirements around the protection of
client money and assets held by firms, as part of a review of a
large part of its Client Assets (CASS) handbook.