Hedge funds, as measured by the Dow Jones Credit Suisse Hedge Fund Index, finished December up 1.48 per cent.
Overall performance for 2012 was 7.67 per cent, according to the Dow Jones Credit Suisse Hedge Fund Index team’s 2012 Hedge Fund Market Review.
Though the industry saw estimated outflows of approximately USD31bn in 2012, overall assets remained relatively stable at USD1.8trn when factoring in performance gains.
The fixed income arbitrage and global macro sectors experienced the largest asset inflows on a percentage basis in 2012, with inflows of 16.0 per cent and 3.6 per cent, respectively.
A greater number of hedge fund managers posted positive performance in 2012, approximately 75 per cent compared with about 35 per cent in 2011.
On an industry-wide basis, a larger percentage of asset inflows went to funds with monthly or better liquidity, suggesting greater investor demand for more liquidity.
Overall, hedge funds, as represented by the Dow Jones Credit Suisse Hedge Fund Index, continued to provide positive risk-adjusted returns relative to other strategies.