Hedge fund managers started 2024 with the highest level of confidence in their firm’s economic prospects on record at the Q1 stage of the year, according to the latest Hedge Fund Confidence Index from the Alternative Investment Management Association (AIMA).
The quarterly report provides a snapshot of fund managers’ confidence in their economic prospects for the coming 12 months, by asking respondents from 180 global hedge fund firms worldwide for a score of between -50 and +50.
In Q1, overall confidence increased to +19, up from 16 in the previous quarter.
The AIMA said this is a repeating trend over 14 quarters, whereby Q1 confidence levels out after a low in Q4.
Hedge funds are asked to consider their firm’s ability to raise capital, their firm’s ability to generate revenue and manage costs, and the overall performance of their fund as part of the survey.
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However, managers felt their prospects were particularly bright this year, with Q1 2024 the highest level of confidence recorded at the end of a first quarter since the survey began.
The increase was evidenced across all regions, most notably in Emea.
For UK hedge funds, 95% of respondents had increased confidence in their firm’s ability to generate revenue and manage costs. Some 85% were also more positive on their ability to raise capital, while 80% had improved faith in the prospects for their fund’s performance.
Tom Kehoe, AIMA global head of research and communications, said: “The Q1 2024 Hedge Fund Confidence Index underscores a notable resurgence in optimism within the hedge fund industry, marking a robust start to the year.
“Hedge fund managers, particularly smaller firms, appear more bullish about their ability to raise capital, manage costs, and generate returns for investors. Further reasons for hedge funds to be optimistic come in the shape of anticipated rate cuts and possible lesser industry regulatory headwinds as the year evolves.”
