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Hedge Funds End Third Quarter in Positive Territory – October 2013

by Selina Sy

  • 16 Oct 2013
  • HF

Preqin’s early benchmarks reported that Q3 ended positively for single-manager hedge funds, which posted 1.72% across all regions and strategies for September and the highest return since January (+2.48%). Despite this optimistic bounce back from -0.14% reported in August, the industry’s year to date return of 7.15% remains slightly short of the 7.37% gain during the same period last year.

Single-manager hedge funds employing long/short strategies posted 2.40%, where long bias funds were the main contributors to this benchmark, posting 4.04% for the month. This was followed by event driven strategies, which also outperformed the overall average, posting a gain of 2.03% for September. Event driven strategies remain the top performing strategy so far this year returning 10.93% for 2013. All other major strategies tracked by Preqin also posted positive returns this month, including multi-strategy (+1.54%) and relative value strategies (+0.59%). Macro strategies lagged behind, posting the lowest average return of 0.37% for September and bringing its year to date return to a small gain of 0.56%.

Hedge funds with a geographic focus on the Asia-Pacific region enjoyed a particularly good month, posting 3.36% for September and bringing a strong return of 12.58% for the year so far. This performance was followed by funds with a North American focus, which generated 2.26% for the month, up from -0.14% in August and contributing to a healthy 11.19% year to date. Hedge funds with a European focus also exceeded the industry benchmark, posting 2.15% for the month and gaining 8.90% to date in 2013.

Multi-manager hedge funds reporting to Preqin gained 1.07% for September (+4.51% YTD), up from a loss of 0.53% in August, according to preliminary benchmarks. Funds of hedge funds employing a long/short strategy were the main contributors, posting 1.67% for the month and 6.83% for the year so far.
Preqin’s benchmark data indicates that UCITS hedge funds posted 2.24% across all strategies for September, representing the group’s best recorded month of the year so far and taking performance to 4.62% year to date. Long/short strategies fared particularly well and were the largest contributors to the UCITS benchmark, gaining 3.62% for the month and posting 8.39% YTD, compared to 5.58% for the same period last year. Relative value and macro strategy UCITS vehicles also posted smaller gains at 0.33% and 0.11% respectively.

CTAs have continued to decline and have suffered their fifth consecutive loss this year, posting an average of -0.58% for the month and -2.51% for the year across all regions and strategies. This compares unfavourably to last year which saw the same period up 3.12%.

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