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Global Hedge Fund AUM Declines in August, New Launches Up

Date: Wednesday, September 18, 2013
Author: Alex Akesson, HedgeCo.net

New York (HedgeCo.Net) – Hedge funds witnessed slightly negative returns in August according to this month’s Eurekahedge Hedge Fund Index, which was down 0.23%. Global hedge fund AUM declined by $6.3 billion, but on the bright side, launch activity picked up the pace with more than 500 funds launched globally year-to-date.

“Risk aversion returned to global markets in August driven by a host of factors.” Eurekahedge said, “The increased likelihood of the United States waging another war in the Middle East, weakening economic situation in emerging markets and continued concerns of QE tapering by the US Federal Reserve (Fed) were the main drivers of the negative market sentiment during the month.”

Other highlights in the August report include:

  • Asia ex-Japan hedge funds outperform underlying markets by 10% August year-to-date
  • Assets in long/short equity hedge funds crossed the $600 billion for the first time since 2008
  • Distressed debt investing remains the best performing strategy in 2013, up 9.77% as at end-August
  • Japanese hedge funds outperformed the Nikkei 225 for the fourth consecutive month, up 18.82% year-to-date
  • As at 2013 year-to-date, Eurekahedge is tracking more than 600 funds that have delivered over 15% and 200 funds that are up more than 30%
  • Eurekahedge CTA/Managed Futures Hedge Fund Index witnessed fourth consecutive month of negative returns in August, down 0.43% during the month

Returns were mixed among the various regional mandates with Latin American and North America hedge funds delivering the strongest returns.

Total assets under management (AUM) declined by $6.3 billion during the month, bringing the size of the industry to $1.90 trillion. Most of the negative impact on total assets came from negative performance in August as managers lost $4.7 billion over the course of the month. The industry also witnessed net negative asset flows of $1.62 billion during the month.

Alex Akesson
Editor for HedgeCo.net
alex@hedgeco.net