Reuters – Hedge funds trying to boost pedestrian returns must look beyond stable U.S. equity and bond markets to Europe and Asia, where they can exploit greater volatility, industry officials say.
The $1.1 trillion hedge fund industry thrives on volatility, using investment strategies to exploit arbitrage opportunities and generate returns that have traditionally outstripped those of conventional funds.
But hedge fund performance slumped last year. With competition growing as more money pours into the industry, fund managers need to scour the globe for investments, officials said at a hedge funds conference in Dubai.
“Traditionally the hedge fund community has invested most of their assets in the U.S,” said Teun Johnston of Credit Agricole Alternative Asset Management.
“In the U.S. the markets are now more efficient, there are lot more funds and I think (it’s getting) harder for hedge funds to achieve returns,” he said.
