European and Asian hedge funds will be focus of 2018, predicts Deutsche Bank
15 February 2018 London
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Western Europe has displaced North America as the most sought after investment region, according to a survey released by Deutsche Bank.
The annual survey, released on 15 February, found that 37 percent of investors asked are planning to add to their European exposure in 2018, compared to last year’s 17 percent.
Asia was close behind, as 30 percent of investors surveyed said they plan to add to their Asia exposure, which includes Japan. This percentage was 9 percent higher than 2017.
Ashley Wilson, global co-head of prime finance and Europe, Middle East and Africa, (EMEA) head of equity trading at Deutsche Bank, said: “Investors appear more optimistic in their outlook for Europe and Asia.”
“Our survey indicates that investor interest in European hedge funds has more than doubled year on year[...]These regions provide more alpha opportunities across multiple countries with diverse market structures.”
Elsewhere, Deutsche Bank also found that both long and short fundamental equity is “back in vogue”, as one in five respondents said they were planning to add to fundamental equity long/short funds in 2018—making it the second most in-demand strategy for the year ahead.
This result comes in stark contrast to Deutsche Bank’s findings last year where the 2017 annual survey found only 4 percent of respondents were looking to add to long and short fundamental equity.
Deutsche Bank stated that the context in which investors responded to the survey was after a strong year for risk assets globally and that many equity indices ended the year at or close to multi year highs.
In addition, the hedge fund industry ended the year with high single digits, posting the best annual performance since 2013.
Deutsche Bank asked 436 global hedge fund investors, representing two thirds of industry assets.
Marlin Naidoo, global head of capital introduction and hedge fund consulting at Deutsche Bank, said: “While investors are committing more capital to hedge funds as part of their overall portfolio the competition for these dollars remains strong.”
He added: “This is because most investors expect to keep their number of allocations constant, creating a ‘one in, one out’ scenario. Fund managers need to continue to differentiate themselves via outperformance, bespoke fee arrangements and uncorrelated investment strategies.”
The annual survey, released on 15 February, found that 37 percent of investors asked are planning to add to their European exposure in 2018, compared to last year’s 17 percent.
Asia was close behind, as 30 percent of investors surveyed said they plan to add to their Asia exposure, which includes Japan. This percentage was 9 percent higher than 2017.
Ashley Wilson, global co-head of prime finance and Europe, Middle East and Africa, (EMEA) head of equity trading at Deutsche Bank, said: “Investors appear more optimistic in their outlook for Europe and Asia.”
“Our survey indicates that investor interest in European hedge funds has more than doubled year on year[...]These regions provide more alpha opportunities across multiple countries with diverse market structures.”
Elsewhere, Deutsche Bank also found that both long and short fundamental equity is “back in vogue”, as one in five respondents said they were planning to add to fundamental equity long/short funds in 2018—making it the second most in-demand strategy for the year ahead.
This result comes in stark contrast to Deutsche Bank’s findings last year where the 2017 annual survey found only 4 percent of respondents were looking to add to long and short fundamental equity.
Deutsche Bank stated that the context in which investors responded to the survey was after a strong year for risk assets globally and that many equity indices ended the year at or close to multi year highs.
In addition, the hedge fund industry ended the year with high single digits, posting the best annual performance since 2013.
Deutsche Bank asked 436 global hedge fund investors, representing two thirds of industry assets.
Marlin Naidoo, global head of capital introduction and hedge fund consulting at Deutsche Bank, said: “While investors are committing more capital to hedge funds as part of their overall portfolio the competition for these dollars remains strong.”
He added: “This is because most investors expect to keep their number of allocations constant, creating a ‘one in, one out’ scenario. Fund managers need to continue to differentiate themselves via outperformance, bespoke fee arrangements and uncorrelated investment strategies.”
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