HomeInsightsResearchQuarterly UpdatesHedge Funds Q2 2022

In this report:

Stressful Q2 for hedge funds

Disappointing performance

Industry launches

Investor caution

Uncertainty ahead

Preqin Quarterly Update: Hedge Funds Q2 2022

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Hedge Funds Q2 2022

July 20, 2022

Summary

Preqin’s hedge fund benchmark declined by 7.95% during the quarter. Market volatility is unlikely to end in Q3, and the lack of attractive returns in 2022 has made investors nervous, influencing the way allocators think about their hedge fund allocations. That said, plenty of dislocations have formed over recent months, and could create long-term opportunities for the industry.

Sam Monfared, PhD, CFA, CAIA

VP, Research Insights

Despite a stressful Q2 2022, hedge funds once again protected investors, but less so than many had expected

Equity and debt markets were under pressure in the second quarter as investors suppressed prices due to rate hikes and an increased risk of global recession. US investors’ focus was on inflation changes and the Federal Reserve’s policy response to CPI movements. The US central bank aggressively increased the target range twice during the quarter in response to high inflation, shocking the markets with a 75bp hike in June.

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We'll be taking a break from publishing our Preqin Quarterly Updates in Q3 2022, but you'll be able to read our full analysis of developments and opportunities in each asset class up to the third quarter in our 2022 Global Annual Reports. Look out for them in December 2022.

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In an ever-changing economic environment, private capital markets reflect the impacts of global political changes, government and regulatory scrutiny, technological advances, public opinion, and consumer behavior. Fund managers, investors and those working with them need to adapt - and fast.

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