2013 is a record year for hedge funds - report

By Rizza Sta. Ana

Jan 02, 2014 12:18 PM EST

According to Eurekahedge, the largest independent data provider in the world, last year was a record period of sorts for hedge funds globally. The data provider said assets under management by hedge funds worldwide expanded to an all-time high of $2.01 trillion, which is a $228.8 billion gain. The research house also pointed several facts that made 2013 a year for hedge funds, of which Business Insider highlighted in a separate report.

The research firm's Hedge Fund Index gained 0.99% in December and a 8.02% gain overall for the year 2013, a positive return for hedge funds for the fourth month in a row. Gain on assets under management at $228.8 billion was said to be the fastest yearly growth recorded since year 2007. Eurekahedge also revealed that net capital allocations gave hedge fund managers enough to entice around $146.1 billion in investment capital, which was an impressive turnaround as compared to the hedge fund industry's combined $109.6 billion of net asset flows of the past three years.

Hedge funds that have an Asian-pacific focus were seen to have realized its best returns, recording a 15.3% increase in 2013. Greater China and Japan-focused hedge funds were observed by Eurekahedge to have delivered the most impressive returns yet, with up to 19.3% and 25.7% in returns respectively. Asset-weighted index Mizuho-Eurekahedge Index, on the other hand, finished 2013 with 6.63% in gains, which indicated that larger funds underperformed slightly as compared to small and medium sized funds.

Among all strategies, Eurekahedge noted that distressed debt hedge funds delivered the strongest performance, gaining 16.8% last year. Long and short equities were said to have gained at 14.3% gains during 2013, followed by event-driven hedge funds at 11.3% in gains.

The Fund of Funds Index of the research firm jumped 7.79%, which was behind hedge funds in terms of marhins as multi-managers recorded its best performance since the year 2009. Moreover, managers of fund of hedge funds are tracking hedge funds with multi-managers outperforming hedge funds this year in six out of the 12 months. The multi-manager model was seen to be more agile due to the combined strategy of reduced fees, diversification and the winding down of underperforming funds, the report said.

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