APAC-focused hedge funds outperformed their North America- and Europe-focused peers in Q2 with an average net return of 3.5%, versus 0.18% and 1.44% respectively, according to Preqin’s Hedge Funds Q2 2024 report.
According to the report’s lead author, Charles McGrath, the outperformance is attributed to equity funds, which were some of the best performing funds in Q2 2024 as per Preqin’s APAC hedge funds benchmark. These gains were bolstered by public equity market gains in Taiwan and India specifically.
Overall, Preqin’s All Hedge Fund Index rose by 0.17% in Q2 2024, compared to 5.84% in Q1 2024 and 7.19% in Q4 2023. Inflation concerns persisted early in Q2 2024, with the US Consumer Price Index in particular remaining steady, which, at the time, resulted in doubts about future rate cuts.
In terms of individual strategy performance, relative value had the highest net return in Q2 2024, at 2.06%, while multi-strategy and credit strategies also performed well, with net returns of 1.44% and 1.14%, respectively.
Macro strategies meanwhile, were the only top-level sub-strategies to see a net loss overall, at -0.16%. However, 12-month returns from June 2023 to June 2024 show that macro strategies and equity strategies were the best performing, at 12.90% and 11.10%, respectively.
Equity market exposure continues to be a determining factor when it comes to hedge fund performance, with equity-market-neutral strategies ranking as the top performing relative value strategy, and better than most hedge fund strategies overall, at a 2.40% net return for Q2 2024.
The report also shows that a larger share of investors plan to deploy less capital to hedge funds over the next 12 months. As of June 2024, 79% of investors plan to deploy less than $50m to hedge funds, compared with 71% according to Preqin’s March 2024 data.
In a statement, McGrath said: “Unique to APAC-focused strategies’ outperformance in Q2 2024 was their consistent upward trajectory through the quarter, with gains in each month.
“North America-focused funds finished near breakeven as gains in May helped to recover some of the decline in April, before a modest uptick in June. This relative outperformance by APAC funds highlights the diversification the region offers to a global portfolio that’s been affected by volatility in even the most stable economies over the past three months.”
