Hedge funds come out swinging in 2017
17 February 2017 London
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Strong gains across all hedge fund strategies and regions last month could repair investor confidence and stem the heavy outflows of capital, according to Preqin.
Despite hedge funds returning 7.4 percent over 2016, investors steadily withdraw capital throughout the year, with overall net asset outflows totalling $110 billion by the end of 2016.
Preqin data revealed that every leading hedge fund strategy suffered net outflows for the year.
Funds will be hoping that avoiding a repeat of the troublesome start to the year that many funds suffered at the beginning of 2016, while also being on track to achieve a five-quarter win streak, will be enough to reverse the current trend of investors fleeing the market.
Preqin’s all-strategies hedge fund benchmark recorded gains of 1.4 percent in January 2017, the highest January performance recorded since 2013 (2.59 percent).
This also represents the highest performance month for the industry since April 2016, as funds built on gains of 1.07 percent seen in December.
All regions saw positive performance through January, with emerging markets leading the charge, boating returns of 3.45 percent, followed by Asia Pacific with 1.79 percent.
North American funds posted returns of 1.26, while European funds continued to trail significantly with returns of just 0.76 percent.
Preqin’s head of hedge fund products, Amy Bensted, commented: “Hedge funds have had a strong start to 2017, posting their best monthly returns since April, and their best January performance since 2013.”
“In contrast, if we rewind the clock 12 months to January 2016, the industry recorded losses of 2.7 percent. Given the consistent improved gains the industry recorded through much of the latter part of 2016, this now puts 12-month performance for the industry into double figures for the first time since August 2014.”
Bensted added: “The largest proportion of investors surveyed in December 2016 cited performance as the leading reason why they had redeemed hedge fund investments over 2016. Therefore, this improved performance of the industry as a whole could help to win over those investors that have become more cautious towards hedge funds.”
Despite hedge funds returning 7.4 percent over 2016, investors steadily withdraw capital throughout the year, with overall net asset outflows totalling $110 billion by the end of 2016.
Preqin data revealed that every leading hedge fund strategy suffered net outflows for the year.
Funds will be hoping that avoiding a repeat of the troublesome start to the year that many funds suffered at the beginning of 2016, while also being on track to achieve a five-quarter win streak, will be enough to reverse the current trend of investors fleeing the market.
Preqin’s all-strategies hedge fund benchmark recorded gains of 1.4 percent in January 2017, the highest January performance recorded since 2013 (2.59 percent).
This also represents the highest performance month for the industry since April 2016, as funds built on gains of 1.07 percent seen in December.
All regions saw positive performance through January, with emerging markets leading the charge, boating returns of 3.45 percent, followed by Asia Pacific with 1.79 percent.
North American funds posted returns of 1.26, while European funds continued to trail significantly with returns of just 0.76 percent.
Preqin’s head of hedge fund products, Amy Bensted, commented: “Hedge funds have had a strong start to 2017, posting their best monthly returns since April, and their best January performance since 2013.”
“In contrast, if we rewind the clock 12 months to January 2016, the industry recorded losses of 2.7 percent. Given the consistent improved gains the industry recorded through much of the latter part of 2016, this now puts 12-month performance for the industry into double figures for the first time since August 2014.”
Bensted added: “The largest proportion of investors surveyed in December 2016 cited performance as the leading reason why they had redeemed hedge fund investments over 2016. Therefore, this improved performance of the industry as a whole could help to win over those investors that have become more cautious towards hedge funds.”
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