Hedge Funds Remain on Course to Exceed 2012 Returns - December 2013

by Graeme Terry

  • 18 Dec 2013
  • HF

Preqin’s preliminary benchmarks for November indicate that single-manager hedge funds across all regions and strategies achieved positive performance for the third consecutive month in November, with average returns of 0.93%. This takes year-to-date (YTD) returns to 10.05%, marginally behind the 10.13% average recorded in 2012. All of the major Preqin strategy benchmarks were positive in November, with long/short funds coming out on top with returns of 1.22%. Event driven strategies continue to top year-to-date returns at 14.43%, following average November gains of 1.15%. The multi-strategy (+0.93%), macro strategies (+0.37%) and relative value (0.21%) benchmarks were also positive in November, albeit with more muted returns.

In terms of regional benchmarks, Asia-Pacific hedge funds continue to lead the way in 2013, with November gains of 1.57% taking YTD returns to 15.93%. North America-focused funds marginally exceeded Asia-Pacific-focused funds in November with gains of 1.70%, taking this regional benchmark to 15.36% YTD. Europe-focused funds also produced positive returns for the month (+1.18%), while there were marginal gains for the emerging markets benchmark (+0.07%).

According to early Preqin benchmarks, funds of hedge funds had a successful month, outperforming the single-manager benchmark with average gains of 1.11%. These funds are now up 7.10% YTD, meaning that multi-manager funds are on course for their best yearly performance since 2009. Single-strategy multi-manager funds were most successful in November, with long/short and macro strategies funds returning 1.45% and 1.60% respectively, compared to average 1.01% returns amongst multi-strategy funds.

UCITS-compliant hedge funds again fell short of the overall hedge fund benchmark in November, but did provide positive returns (+0.49%) to take YTD performance across all strategies to 6.40%. Long/short was the top performing strategy benchmark within this sector, with this strategy up 0.78% in November and 11.11% YTD. The UCITS macro strategies benchmark remains in negative territory for 2013 (-0.29%), after suffering a marginal decline in November (-0.07%).

CTAs have recorded back-to-back months of positive performance in October and November, but remain in negative territory for the year as a result of six negative months. November gains of 0.69% have taken the CTA benchmark to -0.70% YTD, and these funds look set to record their worst performing year on record. North America-focused CTAs have fared particularly badly, with further losses of 1.35% in November meaning that this benchmark is down 6.83% in 2013 YTD.

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