GENEVA (HedgeWorld.com)–Investment in global macro strategies is set to rise, according to Tara Capital, a hedge fund consultancy, which released the eleventh installment of its Hedge Fund Strategy Barometer–a survey of 28 European investors with a combined $67.5 billion invested in hedge funds.
This year’s HFSB shows a rise in demand for global macro managers, with 63% of survey respondents saying they’ll increase their exposure to that strategy. No respondents said they’d exit.
In a statement, Tara said that the popularity of global macro “is interesting given the relatively muted performance from the strategy of late.”
The barometer also detected improved weather for convertible arbitrage, with almost one fifth of the respondents planning to increase exposure there. This is a big swing from the showing of the same strategy in the December survey.
Other news from the March 2006 Tara survey:
oDemand for equity market neutral has declined somewhat–i.e., there’s been a correction of the sizeable increase in its popularity in the fourth quarter.
oDemand for fixed-income strategies has declined significantly, with 37% of respondents saying they’ll lower their exposure.
oDemand for distressed funds is “muted,” and even demand for multi-strategy event-driven management that includes a distressed component is “relatively subdued,” despite an improvement over poling results last quarter.
oThe merger arb sector, though, which was strong throughout 2005, remains so.
oDemand for emerging market hedge funds is on the increase–41% of investors plan to increase their allocations. Just last quarter Tara was wondering whether the EM sector is past its peak. This quarter’s figures give a firm negative answer.
oJapan long/short hedge funds have declined slightly in popularity since the last survey. Tara suggests this ought to be seen in the context of “an extraordinarily good run over the last few years.”
oMore rough times are ahead for commodity trading advisers and managed futures. For the third quarter in a row, more allocators say that they will reduce than say that they will increase their investments there.
Contact Bob Keane with questions or comments at firstname.lastname@example.org.