Hedge fund investors confident about Europe

Europe-focused strategies have attracted inflows from hedge fund investors, who show confidence in Europe’s credit and equity markets.

The European focus is becoming a year-long trend, with inflows of $2.4 billion (€1.8 billion) into Europe-focused strategies in July and $25 billion so far in 2014, according to a report by eVestment, a data and analytics firm.

Investor interest in equity exposure remained high in July, continuing the positive results seen for the last 13 months since the interest rate spike last summer. Inflows of $8.3 billion in July brought year-to-date totals to $74 billion, the largest for equity-focused hedge funds since 2007.

In the report, eVestment vice president of research Peter Laurelli says: “The primary driver of new money coming into hedge funds focused on equity markets has likely been a repositioning of institutional assets away from traditional long-only US equity strategies, in search of flexible directional exposure to global capital structure opportunities via hedge funds.”

Event-driven funds also performed well in July, bringing in an estimated $2.2 billion for the month and $37.2 billion so far this year. Investors showed continuing interest in emerging markets, particularly in Latin America funds.

Overall, assets in hedge funds rose $4.9 billion in July, according to eVestment, below the 12-month inflow average of $14.6 billion.

eVestment notes the loss of pace to outflows from credit strategies and macro funds. The former saw $2.4 billion redeemed during the month, while macro outflows of $2.5 billion in July turned year-to-date flows negative.

Total industry assets are more than $3 trillion, says the firm.

©2014 funds europe

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