European demand for hedge funds remains firm

Hedge fundInvestment consultants in London are looking for hedge fund strategies that diversify equity beta, while European pension funds are looking for hedge funds to give them niche investments, market research from Deutsche Bank reveals. London-based consultants have also developed a renewed interest for smaller and emerging managers. The trend is driven by their clients, the bank says in a report. Despite high fees and recent underperformance, European pension funds still say the alternative investment industry adds value to portfolio management and Deutsche Bank says many pension funds want to form strategic partnerships with hedge fund managers instead of traditionally allocating to commingled funds. Meanwhile, appetite for hedge funds in Europe “continued its positive momentum in September”. This is despite a drop in performance for hedge funds recently. The median fund lost 0.69% in September – but hedge funds still beat the MSCI World index, which was down 3.86%, and the S&P 500, which was down 2.64%, says Deutsche Bank’s Global Prime Finance Monthly Hedge Fund Trends. Market neutral and credit strategies are the top performing hedge fund strategies year to date at the end of September Median fund performance for all strategies in the year to date at the end of September was 0.90% and this return again beat major global indices. Market neutral and credit rank as the top performing strategies. Despite beating major indices, hedge funds are going through their longest period of decline since the financial crisis, HFR, a hedge fund research firm, recently said. ©2015 funds europe

Executive Interviews

INTERVIEW: Put your money where your mouth is

Jun 10, 2016

At Kempen Capital Management, they believe portfolio managers should invest in their own funds. David Stevenson talks to Lars Dijkstra, CIO of the €42 billion manager.

EXECUTIVE INTERVIEW: ‘Volatility is the name of the game’

May 13, 2016

Axa Investment Managers chief executive officer, Andrea Rossi, talks to David Stevenson about bringing all his firm’s subsidiaries under one name and the opportunities that a difficult market...


ROUNDTABLE: Beyond the hype

Oct 13, 2016

The use of smart beta investing continues to grow. Our panel, made up of both providers and users, discusses what the strategy actually means, how it should be used and the kind of pitfalls that may arise when using this innovative investment technique.

MIFID II ROUNDTABLE: Following the direction of travel

Sep 07, 2016

Fund management firms Aberdeen and HSBC Global meet with specialist providers to speak about how the industry is evolving towards MiFID II.