North American hedge funds have reached an all-time high level with a total value of $1.2 trillion, according to the latest Eurekahedge Report.
Asia-based funds investing into North America outperformed managers in all other regions with the highest performance over three- and five-year periods, Eurekahedge says, returning 50.65% and 30.87%, respectively. Additionally, managers that charge higher fees and have a lower redemption frequency had greater returns.
The Eurekahedge Hedge Fund Index itself was up 1.10% in July and 2.57% year-to-date, although the industry saw outflows of $4.2 billion in the month. July was a rebound month for hedge funds, which had been on the decline for four straight months. Institutional investors, particularly pension funds, have been amping up the new inflows into hedge funds recently, according to a report from an EDHEC-Risk report highlighted by J.P. Morgan yesterday.
Most asset flows in North America have been allocated to the larger funds, Eurekahedge says, with the continents largest fund accounting for a full 10% of the assets in the sector. Attrition has been on the rise in the second quarter, with the number of closures exceeding the number of new launches.
Meanwhile, SS&C GlobeOps Forward Redemption Indicator, which represents the sum of forward redemption notices received from hedge fund clients of the firm divided by total assets under administration, was 3.34% in August, a rise over Julys 2.18%. “Forward redemptions increased in August, which is typical as we approach quarter end, but redemption notices remained at moderate levels indicating continued investor satisfaction with alternatives,” says Bill Stone, chairman and CEO of SS&C Technologies, which recently acquired GlobeOp to become one of the largest third-party fund administrators.
GlobeOp forward redemptions peaked in November 2008, at the height of the financial crisis, at 19.27%, the firm says.
(CG)