Hedge funds attracted marginally positive flows from investors last month, as the industry notched up a 3% weighted average gain in July following a torrid first half for investment performance.

​​​​​​​An overwhelming majority of macro hedge funds and trend-following managers are upbeat on their performance prospects for the rest of the year – but confidence among equity-focused firms has plummeted following 2022’s stock market upheaval.

Following a challenging second quarter, the hedge fund industry came back fighting in July, advancing 2.89% for the month, according to the Barclay Hedge Fund Index, with much of the uplift coming on the back of a seemingly improbable surge

Performance dispersion among hedge funds has narrowed in recent weeks, as almost 60% of managers generated profits in July – with long/short equity, event driven and relative value strategies all making gains, according to new industry data.

Hedge funds’ capital-raising activities in Europe could be hindered by new rules impacting the pre-marketing process under changes to the EU’s Alternative Investment Fund Managers Directive, industry practitioners warn.

Listed interest rate derivatives and commodities futures and options have been identified as the best performing asset classes for proprietary trading firms in the first half of 2022 as fears of a recession and soaring inflation caused volatility across global

Despite a broader industry trend that saw hedge fund redemptions accelerate slightly in May to -$27.53 billion (-0.54% of industry assets), some hedge fund subsectors did manage to add to assets over the month, according to the latest Barclay Fund

As hedge funds’ compliance teams get to grips with a byzantine array of plans from market authorities on both sides of the Atlantic, wider economic and political developments are continuing to recalibrate the investment and regulatory environment.

Regulatory change in Europe is gathering pace following the pandemic, and as ESMA’s plans for enhancing AIFMD and MiFID remain on managers’ radars, the post-Brexit FCA implementation of the new IFPR may bring added headaches.