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.<\/p>\n
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.<\/p>\n
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.<\/p>\n
“Traditionally the hedge fund community has invested most of their assets in the U.S,” said Teun Johnston of Credit Agricole Alternative Asset Management.<\/p>\n
“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.<\/p>\n