In this month’s The Eurekahedge Report they cover the US$54.9 billion Latin American hedge funds industry with an infographic overview, commentary alongside our coverage of monthly returns, performance and asset flows. We also provide an insight into the Eurekahedge CTA/Managed Futures Index and its continued ability to attract investor capital in the latest strategy profile.
David Liebowitz of Aroya Capital LP; who manages a relative value volatility fund, discusses how to profit from arbitraging the term structure of equity volatility in our latest video interview. The manager is also on track to outperform the CBOE Eurekahedge Relative Value Volatility Hedge Fund Index for the second consecutive year in a row.
Hedge funds were up 2.85% for the year, on track for a better showing compared to 2015 when the average fund realised modest gains of 1.65%. Asset growth for the industry remains muted in 2016, expanding by US$1.7 billion, a sharp detraction from the US$102.5 billion growth seen in 2015.
While hedge fund capital allocations are in the red for 2016 with outflows of US$16.6 billion for the year, investor subscriptions have favoured CTA/managed futures, multi-strategy and relative value strategies which have seen inflows of US$12.2 billion, US$5.4 billion and US$4.0 billion respectively.
Hedge funds managing in excess of US$1 billion have seen their asset base decline by close to 2% over the year, with redemptions of US$27.0 billion while performance-based gains stood at US$7.3 billion. In contrast, sub-billion dollar funds have fared relatively better with inflows of US$10.4 billion and performance-based gains of US$11.0 billion.
Net flows for Asia ex-Japan mandated hedge funds went in the red for the year following steep redemptions worth US$2.1 billion in October – the highest monthly redemption on record since July 2012. Overall asset growth for Asian mandates is in the red for the year following disappointing returns from Japan (down 0.92%) and Greater China (down 2.15%).
Among emerging mandates, Latin American long/short equities hedge funds have posted the lowest volatilities levels over the three and five year period compared to regional peers in India and China. More details in Eurekahedge’s 2016 Overview: Key Trends in Latin American Hedge Funds report.
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Shayne Heffernan Funds Manager at HEFFX holds a Ph.D. in Economics and brings with him over 25 years of trading experience in Asia and hands on experience in Venture Capital, he has been involved in several start ups that have seen market capitalization over $500m and 1 that reach a peak market cap of $15b. He has managed and overseen start ups in Mining, Shipping, Technology and Financial Services.