After delivering lacklustre returns during August, hedge fund managers returned to form during September to record some of their best results for the year so far.
Along with a strong July, figures for September have helped push the hedge fund benchmark to 7.17%, according to alternatives research house Preqin.
Event driven strategies have fared particularly well, and over the last quarter the typical return was just over 4%. Year to date returns are close to 11%, compared to 8% for the same stretch last year.
Winners
Preqin said that event driven strategies, which take advantage of special situations like company mergers or restructures, have been driving investor interest in the hedge fund world.
“Performance is seen as both the key issue in the industry and a key factor assessed by institutional investors when looking at hedge funds,” said Amy Bensted, Preqin’s head of hedge funds products. “Funds that have performed particularly well in 2013, notably event driven strategies, are increasingly being sought by investors, whereas those that have been underperforming, such as CTAs, are losing investor interest,” she added.
…and the losers
Given the strain commodities are under, it is hardly surprising that specialised funds like CTA strategies are struggling to get out of the red.
During quarter three the average strategy lost 1.6%, and year to date the losses are close to 2.5%.
Stronger Chinese data at the tail end of last week offered some support to commodities like oil, and the resolution of the US budget dispute took gold back to neutral.
These positives are only expected to be short-lived, however, and according to Saxo Bank’s Ole Hansen, head of commodity strategy, gold short sellers, which are often hedgies, were caught out as the Democrats and Republicans agreed a deal to raise the debt ceiling.
Moreover, Hansen pointed out that the energy sector remained under pressure and is “torn” between the seemingly stronger Chinese data and general uncertainty about demand.
The architechts of CTA strategies look to be taking this on board, as Preqin found that the number of new launches has cooled, even though these figures have held up well within other sectors in spite of the uncertainty created by the Alternative Investment Fund Manager Directive.
