Hedge Funds Benefit From Year-End Optimism in Global Markets

Hedge funds delivered their fourth consecutive month of positive returns in December as global markets ended 2013 on a strong note of optimism, according to Eurekahedge’s latest index report.

The report shows total assets in the hedge fund industry rose to $2.01 trillion in December, the highest level on record since June 2008 when global assets under management peaked at $1.95 trillion.

In 2013, almost 2,750 funds in the Eurekahedge database achieved returns greater than 10% – of which over 1,000 were up more than 20% for the year.

Net asset flows in 2013 stood at $146.1 billion, with net allocations to North American managers standing at $73.6 billion in year-to-date.

Across the Atlantic, European fund managers were up 8.79% in 2013 with net asset inflows for the year standing at $62.4 billion – the highest level on record.

Moving East, Asia ex-Japan hedge funds outperformed underlying markets and were up 13.47% in 2013 with overall assets under management growing by $19.1 billion during the past year. Japanese hedge funds comprehensively outperformed all regional mandates, up 26.62% in 2013.

Latin America focused managers have outperformed the MSCI EM Latin America Index by more than 9% in 2013.

Distressed debt investing remained the best performing strategy in 2013, up 16.76% for the year, followed by long/short equities, which saw gains of 14.87%.