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INSIGHT REPORT
A revolution in technology is transforming the way hedge funds operate, offering managers advantages – as well as challenges – in tumultuous times.
Institutional investors allocated the largest amount of new capital to hedge funds since 2015 in Q1 2022, as Macro funds lead industry performance through extreme volatility driven by generational inflation, interest rate increases and expectations for multiple increases in 2022, and the impact of the Russian invasion of Ukraine, including surging commodity prices driving geopolitical uncertainty and tensions to the highest level in decades.
Total global hedge fund industry capital remained above the $4 trillion milestone, as managers navigated extreme volatility with leadership from uncorrelated Macro strategies, including Fundamental Commodity and Discretionary funds, as well as Quantitative, Trend-Following CTA strategies
Preqin has published its Q1 2022 Hedge Fund Quarterly Report which shows hedge funds were affected by geopolitical factors and turmoil in the markets, posting lower returns during the quarter compared to their strong performance in 2021.
The SEC is facing the possibility of legal action by hedge funds and finance industry groups over its plans to change certain market rules following the collapse of Archegos Capital Management (Archegos), according to a report by The Financial Times.
New research from quant technologies provider SigTech reveals there is a growing focus among fund managers on improving the quality of data, with some 77% of managers interviewed believing that to achieve above-average returns in the future, accessing high quality data and having the technological capabilities to process it efficiently is becoming increasingly important.
The BFAM Asian Opportunities fund is down almost 10% so far in 2022 on the back of a 6.2% fall in March due to bets on China credit and the Russian ruble, according to a report by Bloomberg.
INSIGHT
After two years of virtual introductions, are capital introduction services still a cornerstone of the prime services industry in the way they were pre-pandemic?
INSIGHT
For start-up and emerging managers, successfully launching and running a hedge fund is trickier than ever before. As markets ebb and flow, the level of support provided by prime brokers in the early stages remains critical.
Macro hedge funds surged to lead industry-wide gains in March, completing a record Q1 by again posting sharp returns as financial market volatility was exacerbated by skyrocketing inflation, rising interest rates and expectations for continued increases, and escalation of the Russian military conflict in Ukraine.
The investable HFRI 500 Macro Index surged +6.25 per cent in March, extending its Q1 2022 return to +10.0 per cent, with strong contributions from Commodity, Fundamental Discretionary, and Quantitative, trend-following strategies. The investable HFRI 500 Fund Weighted Composite Index advanced +2.4 per cent for the month, extending its Q122 return to +0.85 per cent,
Confidence levels among hedge fund mangers remain resilient despite the war in Ukraine, Russian economic sanctions, and global inflationary concerns, according to AIMA.
