Mixed results for hedge funds in face of global trade friction
Event driven fund managers ended the first half of 2018 up 2.02 per cent, supported by healthy activities within the M&A sector, says Eurekahedge. However, the escalating tension between the US and China may pose as a headwind for event driven fund managers, as regulators become increasingly strict in approving big M&A deals.
Asian hedge funds were down 1.22 per cent as of June 2018 year-to-date, as they struggle under the pressure of global trade and political concerns. Fund managers focusing in China, India, and Korea posted losses of 4.38 per cent, 2.46 per cent, and 1.60 per cent respectively during the month of June, contrary to their stellar performance last year.
North American hedge fund managers utilising long/short equities strategy have successfully traded their way through the first half of 2018 to remain in the positive territory, returning 2.78 per cent despite the volatile market situation. Among these fund managers, those focusing on technology-related equities in particular have been performing even better, generating 4.77 per cent over the same period.
Tech equities have been a major driving force behind the performance of some North American hedge fund managers since the end of 2016. Over 2017, North American hedge funds focusing on tech equities managed to return 17.09 per cent, vastly outperforming the broader category of North American long short equities hedge funds which generated 9.33 per cent return on average.
Barring the last two years, hedge fund performance fees have been on a trend of decline, as the double fee structure came under investor scrutiny. North American hedge funds which launched over the first half of 2018 charge 13.98 per cent performance fee on average, the lowest figure ever recorded by Eurekahedge.