Hedge fund assets break US$1.8 trillion milestone

Added on 26/05/2011

Hedge funds had another month of positive returns in April by surpassing US$1.8 trillion in assets under management for the first time since the global financial crisis, according to the most recent Eurekahedge report, Fundamentals reports.

According to Eurekahedge, April was the 10th month in a row of positive returns for hedge funds as the Eurekahedge Hedge Fund Index gained 1.58 per cent. Hedge fund assets increased by US$52.3bn in April with net positive glows of US$28.3bn, while hedge funds gained 13.5 per cent in positive returns during the month.

According to the report, net flows for the first quarter of 2011 stand at US$93.9bn in comparison to US$66bn for the entire 12 months of 2010. Fund of hedge funds also reported a promising start to the year with net positive asset flows in the first quarter for the first time since the first quarter of 2008.

Asian hedge funds are continuing to do well with April emerging as their 12th consecutive month of net positive asset flows.

Meanwhile, fund launch activity continues to be strong with more than 200 funds established so far this year.

Hedge funds that follow event-driven strategies had a positive month by breaking US$200bn in assets under management. The report also showed that 43 per cent of investors in fund of hedge funds are looking to increase allocations to event-driven strategies in the next three months. Meanwhile, 34 per cent of those investors are planning to increase their allocations to Asia ex-Japan strategies.

Other highlights in the report included long and short equity funds attracting US$30.7bn year-to-date at the end of April, while funds in CTA or managed futures gained 3.12 per cent during April.