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Fixed income most popular Ucits hedge fund strategy in 2012, says Alix Capital

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More than half the inflows into Ucits hedge funds (EUR13.2bn) were allocated to fixed income strategies during 2012, followed by macro strategies (EUR5.8bn), according to data released by Alix Capital.

The latest quarterly research by the Geneva-based provider of the Ucits Alternatives Index also found that Ucits hedge funds assets under management (AUM) increased by 20 per cent in 2012 reaching a new high of EUR140bn.

The three largest single strategy managers all witnessed significant increases in Ucits hedge fund AUM in 2012: Standard Life Investments’ AUM increased 59.8 per cent to EUR17.437bn; GAM was up 41.2 per cent to EUR12.535bn and M&G’s AUM doubled to EUR10.801bn.

A total of EUR4.7bn was invested in fixed income strategies in Q4, representing 72 per cent of the total inflows to Ucits hedge funds for the quarter.

Three funds achieved performance gains in excess of 30 per cent, 22 returned a performance greater than 20 per cent and 84 achieved a performance above 10 per cent in 2012

Louis Zanolin, chief executive of Alix Capital, says: “Despite the current economic environment, the total assets managed in Ucits hedge funds continued to grow at a stronger rate than the rest of the hedge funds universe.

“Fixed income was the most popular strategy and I believe this was not only money shifting from other strategies in the hedge fund space, but from long only products as well. Investors wanting exposure to fixed income are looking to absolute return funds in order to limit their risk exposure. Traditional offshore investors are also looking to Ucits vehicles for increased liquidity and to meet new regulatory constraints.

“In 2012 the five largest fixed income funds attracted 55 per cent of total inflows into the Ucits hedge funds sector across all strategies, and 90 per cent of the inflows into fixed income strategies. This can be attributed to performance – some of these large funds achieved the best results in 2012, for example M&G Optimal Income – but also to investors’ preference for blue chip names, especially true for new investors coming from the long only space.”

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