2014-02-16 07:52:38 - Total capital invested in hedge funds worldwide has surged to over $2.6 trillion, driven by massive inflows for top performing funds.
Hedge fund managers are attracting billions of dollars worldwide, and they are positioning themselves for another bullish year in 2014.
Investor capital rose to $2.63 trillion, with growth distributed across all strategy areas, according to HFR Inc.
“We are seeing a shift in how investors view hedge funds,” said Amy Bensted, head of hedge funds at Preqn. “Pre-08, investors thought of them – and hedge funds marketed themselves – as a source of additional returns. Now, they are not seen just being for humungous, 20 per cen-plus returns, but for smaller, stable returns over many years.”
According to a report by LCH Investments, a few hedge funds have posted their best-ever returns in dollar terms in 2013.
Peter Tasca, CEO of
Laureate Trust, a British Virgin Islands based fund which returned 23% net of fees in 2013 states, “We have seen a lot interest from the Middle East as well as Europe, our focus is for an absolute return, we are looking at housing, debt instruments and technology in 2014. We expect to generate double digit returns once again.”
Investors took notice when Laureate BVI launched a retail fund with a €2,500 minimum investment. CEO Peter Tasca says, “We’ve had huge demand for our retail fund. We’ve spoken to investors that want a fund that can profit in any market environment.”
Soros Fund Management, founded by billionaire investor George Soros, shut his firm to outsiders in 2011 and converted into a family office to oversee family money. Soros’ Quantum Endowment fund had its second best money year in 2013 making $5.5 billion, nearly 24% return.
Tasca states, “a hedge fund that can return 7-8% per year is a much better investment than the S&P 500 Index fund that can return 30% in some years and then wipe out all the gains with a 35% loss.”
There are thousands of managers that try to generate alpha but only a fraction can do it on a year-over-year basis.