The global hedge fund business continued its strong start to 2021 with 80 per cent of funds seeing positive performance in February, according to eVestment’s February hedge fund performance data.
The average positive performance among this large group of funds was +4.51 per cent. Factoring in those with negative performance, the industry as a whole returned +3.22 per cent in February, bringing overall industry year-to-date (YTD) performance to +4.26 per cent.
February’s hedge fund performance figures mark a solid year for the industry, according to eVestment Global Head of Research Peter Laurelli.
“Since post-pandemic onset in March 2020, the hedge fund industry has produced aggregate returns of nearly 20 per cent, which is the best 12-month return period for the industry since at least 2011,” says Laurelli.
Among the primary strategies eVestment tracks, Origination & Financing funds and Event Driven – Activist funds are the strongest out of the gate this year. Origination & Financing funds returned an average of +5.35 per cent in February and have YTD returns of +8.47 per cent. Event Driven – Activist funds posted average returns of +5.28 per cent in February and YTD returns of +6.65 per cent.
Among all hedge fund types eVestment tracks, India-focused funds were the strongest performers in February, returning an average of +7.39 per cent to bring YTD performance to +8.13 per cent. On the other hand, Brazil-focused funds were the weakest performers, with an average return of -3.36 per cent and YTD returns now at -8.56 per cent.
Among primary markets tracked, Equity-focused funds were the big performance winners in February, returning an average +4.06 per cent, bringing YTD returns to +5.31 per cent. Commodities-focused funds were just behind Equity-focused funds, returning +4.02 per cent in February, bringing YTD returns to +5.70 per cent.
There were mixed returns among some of the industry’s largest managers in February. With average returns of +1.08 per cent in February, the 10 ten largest reporting hedge funds lagged the overall industry significantly, and these funds’ average YTD returns are essentially flat at +0.02 per cent. However, the 10 largest Multi-Strategy funds, with average returns of +3.62 per cent in February, beat the overall industry average.
“While February was a generally positive month, and the industry is generally off to a good start to 2021, we are still seeing remnants of the difficulties among some larger funds we saw in 2020,” says Laurelli. “The result for the industry last year seemed to be that assets were increasingly driven by returns, but also more non-mega products were gaining assets. With these similar themes in 2021, it will be interesting to watch how assets continue to be distributed around the industry.”
