Scepticism some European allocators feel about the ability of ‘absolute return’ funds to achieve their aims has been vindicated so far this month as almost eight in every 10 European funds in the sector lost money in the volatile first three weeks.
Continuing investor appetite for emerging markets helped hedge funds focused on them hit new high assets of $123bn last quarter, after four consecutive quarters of net inflows.
Hedge funds had much of their gains this year wiped out on Friday as half the alternative strategies reporting daily data to Hedge Fund Research’s investable indices lost over 1% of their value in just 24 hours.
Allocators believe that there are not enough experienced local European distressed debt managers to satisfy the investment potential that lies ahead.
More new hedge funds launched in the first quarter than any time since 2007, fuelled by a tailwind of industry assets breaching $2trn for the first time, however funds also shut down at the fastest rate in the past 12 months.
Fund of hedge funds manager Permal has announced its second senior appointment in as many months, hiring Zhiwu Chen, professor of finance at Yale University, as a consulting chief adviser.
French and Swiss institutions have put $150m into a hedge fund seeding vehicle run by NewAlpha Asset Management, marking part of a revival in the financing of new managers.