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Driving Investment

hedgeweek hugh leask captioned.jpg With ESG data now fiercely in demand among managers, investors and, increasingly, regulators, hedge funds and other investment managers grappling with the lack of consistency and standardisation need to delve beyond the headline metrics in order to gain an edge.

Speaking at this week’s GlobalESGLive summit â€“ hosted by Hedgeweek alongside sister publications Private Equity Wire and Institutional Asset Manager â€“ Silvia Merler, Head of the ESG Committee and Head of the Policy and Research Forum at multi-strategy credit and equities-focused investment manager Algebris Investments, said the scope of ESG data coverage in the European small-caps remains a challenge for asset managers, who are increasingly relying on their own proprietary analysis.

As questions remain over the impact of the new Omicron variant, the prospect of tightened Covid-19 restrictions and fresh waves of infection have been brought into sharp focus, with equity long/short hedge funds now offloading or shorting those stocks seen as most at risk from renewed curbs.

Against a backdrop of rising coronavirus infections in Europe, analysis by Lyxor Asset Management indicates equities-focused managers on both sides of the Atlantic have cut their net and gross exposures in recent weeks, factoring in increased possibilities of new measures.

In the US, managers are favouring energy, materials and industrial sectors, while in Europe, they are piling into industrial and financials, Lyxor said in a note.

Meanwhile, CTAs and trend-following hedge funds were sent into reverse towards the end of last month, as anxieties over the new strain spread to financial markets, puncturing their recent upward momentum. Each of Société Générale’s main managed futures indices, which track the gains and losses of a range of trend-following strategies, finished November in the red, though on a year-to-date basis the sector remains in positive territory.

Allocators added more than USD7 billion of new capital into hedge funds globally during October, the strongest capital inflows recorded in more than a decade for what is a traditionally quiet month for industry coffers, new data published this week by eVestment shows.

Multi-strategy hedge funds and managed futures strategies were the big winners from an allocations perspective during the month, while equity long/short managers returned to negative territory having enjoyed two consecutive months of positive inflows.

eVestment sounded a note of caution on the strong recent flows, indicating that new allocations are becoming concentrated in a small handful of funds and strategies.  

Hugh Leask
Editor, Hedgeweek

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