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  • The largest redemptions during the year have been from big funds that underperformed last year. However, there has also been a lot of money removed from funds that produced decent returns in the first half of the year.

Money flows out of hedge funds as investors continue redemptions in second quarter

Investors redeemed a net $20.70bn from hedge funds in June, bringing the second quarter net flows to negative $10.68bn. The net flows in the first six months of the year were a negative $27.95bn, according to eVestment data.
  • Bearish sentiment is still significantly down after peaking two quarters ago. Global investors are more bearish than their North America counterparts.

Institutional investors worried about economic outlook as bearish sentiment ebbs

Institutional investor sentiment is deteriorating with the worsening macro outlook, decelerating organic growth and uncertain political backdrop, according to research by Corbin Perspective.
  • Nearly half of the managers (48 per cent) said they believe companies and other entities they follow are delaying key business decisions due to policy and political uncertainties in the market.

Growing uneasiness about economic outlook but asset managers remain relatively optimistic

Concerns about job growth, political uncertainty and market volatility are of most concern to investment managers as optimism about the economic climate continues to rise, according to Northern Trust Asset Management’s latest quarterly survey.
  • Asset managers have increased their presence on social networks. This has led to an increase in the interactions they have with clients and followers.

Asset managers lagging behind on use of social media

Social media is becoming more important to asset managers. Even hedge funds are finding social media useful for their businesses despite the challenges it offers.
  • The industry navigated volatility and dislocations related to Brexit to post asset gains for both the second quarter and first six months of the year.

Hedge fund AUM continue to rise as managers successfully navigate tricky market environment

Global hedge fund capital increased in the second quarter rising above the year-end 2015 level to reach the third highest quarterly capital total on record, according to data from Hedge Fund Research (HFR).
  • Guernsey and Jersey, having already implemented AIFMD-equivalent regimes, are categorised as jurisdictions that have no significant obstacles impeding the application of the AIFMD passport.

Esma inches closer to extending AIFMD fund passports to non-EU alternative investment funds and managers

The European Securities Markets Authority (Esma) has issued its advice on the extension of the alternative investment fund managers' directive (AIFMD) passport to investment fund managers and investment funds based in 12 non-EU countries.
  • All hedge fund strategies reported positive performance, albeit some barely in the black for the period to mid-July.

Hedge fund bounce continues as most strategies report positive performance in July

Hedge funds posted gains through mid-July as the HFRX Market Directional Index gained 2.17 per cent and the HFRX Global Hedge Fund Index rose 1.03 per cent, according to Hedge Fund Research (HFR) data.
  • FoHFs now account for only 28.25 per cent of the hedge fund industry’s asset base

FoHFs AUM continues to shrink as the sector’s investment into hedge funds drops

Once the largest single investor in hedge funds, funds of hedge funds (FoHFs) have declined significantly in terms of assets under managements (AUM) as well as the main allocator to hedge funds.