Hedge Funds Review – Hedge funds finished 2012 in positive territory, according to eVestment. Despite reports of investor dissatisfaction, performance contributed with $116.3 billion increasing overall AUM in 2012.<\/p>\n
Hedge fund assets increased almost 6% during 2012 to hit $2.6 trillion as performance added $116.3 billion to the industry total, reports eVestment.<\/p>\n
Assets were also boosted by investor inflows of $29 billion, a 1.18% increase for the year. However, hedge funds lost assets as investors withdrew $10.5 billion in the fourth quarter of 2012.<\/p>\n
The performance-based gains appear to counter reports claiming poor hedge fund performance has disappointed investors who are redeeming. However, Peter Laurelli, vice-president in the research division at eVestment, says the disappointment is generally not about the absolute performance of hedge funds but the performance relative to equity benchmarks.<\/p>\n
“In an environment that was expected to be very difficult and filled with some high-level uncertainties, it makes sense a hedged equity exposure from hedge funds wouldn’t have done as well as 100% beta exposure through an index,” he says.<\/p>\n