Positive investment returns in October have helped pushed total global hedge fund assets to an all-time industry record of more than USD4 trillion, new data published by Hedge Fund Research shows.
HFR described the landmark rise – which has been powered by impressive across-the-board gains in high and low beta, equity, fixed income, commodity and currency strategies, and emerging and established managers – as an “historic milestone”. HFR’s main industry-wide index has advanced 11.44 per cent in the 10-month period since the start of 2021, and is set to outflank 2020’s year-end return.
Meanwhile, with just two months left until the end of 2021, CTAs and trend-following hedge funds are on course to deliver their strongest annual performance since 2014’s landmark showing.
Société Générale’s main CTA Index, a key industry benchmark tracking the gains and losses of the biggest managed futures strategies, has advanced more than 9 per cent this year as managers continue to profit from trends across bonds, equities, indices and commodities markets.
With the COP26 climate talks in Glasgow on a knife-edge as the summit draws to a close, sustainability finance and impact investing remains in sharp focus at all ends of the investment spectrum.
A recent survey of fund managers and investors indicates market participants remain split over how they integrate ESG factors into their risk and investment processes. The study – published jointly by alternatives-focused software-as-a-service and data management firm Vidrio Financial, in partnership with boutique advisory firm Close Group Consulting – found that a lack of clarity over data reliability, comparability and standardisation remains the biggest roadblock to progress.
One strategy making impressive strides trading on decarbonisation trends is the Trium ESG Emissions Impact Fund, a market neutral hedge fund which targets high-emitting companies in hard-to-abate sectors – such as energy, mining and chemicals – with a long/short investment approach.
In this week’s feature story, the fund’s portfolio manager Joe Mares – an industry veteran who previously managed money at Moore Capital, GLG, and Société Générale – discusses his portfolio-building process, what sets the strategy apart within the expanding sustainability investing realm, and the potential tailwinds and challenges that lie ahead for the fund.
After unveiling plans to withdraw from the prime brokerage business, Credit Suisse said this week it will recommend hedge funds and other clients of its prime services unit to BNP Paribas as part of a referral agreement between the two banks.
The Swiss banking and wealth management group will exit most of its PB operations, with the exception of Index Access and APAC Delta One, from early next year, after suffering significant losses as a result of Archegos Capital Management’s collapse in March.
Elsewhere, new research published by Bloomberg shows that while hedge funds have lagged stock markets and traditional equity/bond portfolios in recent years, driving down management and performance fees, firms led by women and minorities are pulling ahead of their industry peers when it comes to returns.
Cryptocurrency-focused Tyr Capital’s main multi-strategy vehicle – which aims to generate alpha through a diversified set of arbitrage and relative value strategies – has increased assets and scored double-digit returns this year, amid what chief investment officer Ed Hindi dubbed a “clear trajectory” in digital assets “that institutions can no longer ignore.”
Hugh Leask
Editor, Hedgeweek