Close Close
Sign In
Newsletters
Popular Financial Topics Discover relevant content from across the suite of ALM legal publications From the Industry More content from ThinkAdvisor and select sponsors Investment Advisor Issue Gallery Read digital editions of Investment Advisor Magazine Tax Facts Get clear, current, and reliable answers to pressing tax questions
Luminaries Awards
Podcast Center Video Center Webcasts Resource Center Events
About ThinkAdvisor Contact Us Advertise With Us Asset & Logo Licensing Sitemap Terms of Service Privacy Policy Copyright © 2024 ALM Global, LLC. All Rights Reserved.
ThinkAdvisor

Portfolio > Alternative Investments > Hedge Funds

Event-driven hedge funds are back in the black

By Warren S. Hersch

X
Your article was successfully shared with the contacts you provided.

Hedge funds have been taking a beating of late. As reported in this space on Sept. 9, hedge funds fell an average of -0.23 percent in value in August. The downward trend, however, is not universal.

A new report from Preqin, a provider of data and information on private equity, real estate, hedge funds and infrastructure asset classes, reveals that hedge funds tied to “event-driven” investment strategies — those that exploit pricing inefficiencies that may occur before or after a corporate event, such as a merger acquisition — were alone among hedge funds in producing positive returns in August (+0.49 percent). All other single-manager hedge fund strategies fell into the negative, with a benchmark return for all single-manager hedge funds of -0.08 percent in August, the report shows.

The research, based on Preqin’s Hedge Fund Analyst database, also reveals that event-driven hedge funds have the highest year-to-date performance for single-manager hedge funds, with net returns of 9.40 percent. The funds have also outperformed all other single-manager strategies over the last 12

months and on a three- and five-year annualized basis.

The Preqin research also reveals the following:

  • Long/short hedge funds were the top performing strategy in July, with average net returns of 2.16 percent, but failed to match this in August, posting average net returns of -0.04 percent.
  • Commodity trading advisors (CTAs) are now on a 4-month losing streak after posting average net returns of -0.56 percent in August, with year-to-date performance of -2.54 percent.
  • Macro strategy funds of hedge funds have year-to-date net returns of 3.45 percent, while macro strategy single-manager hedge funds have only managed net returns of 0.27 percent this year.
  • Long/short hedge funds remain the most favored strategy among investors, with 58 percent of investors in August planning to make new investments in long/short funds over the next 12 months.
  • Sixteen percent of investors plan to invest in event-driven hedge funds.
  • European hedge funds avoided negative returns in August, posting average net returns of 0.19 percent, while North American hedge funds broke even.
  • The Asia-Pacific remains the top performing region over the last 12 months, with Asia-Pacific-focused hedge funds producing net returns of 16.64 percent over the past year, despite August returns of -0.33 percent.
  • Japanese Yen-denominated hedge funds have produced year-to-date returns of 17.14 percent and have an average net return of 24.79 percent for the past 12 months.

NOT FOR REPRINT

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.