Research

Opportunities Investing with Early Lifecycle Hedge Funds: A Preqin & 50 South Capital Study

Hedge funds early in their lifecycle are outperforming established managers by almost 4% per annum, but only half of hedge fund investors would consider evaluating an early lifecycle hedge fund, and even fewer would actually invest.

In this new report, produced in partnership with US-based alternatives asset management firm 50 South Capital, Preqin data finds that:

  • Early lifecycle managers are outperforming established managers by 3.7% and 4.6% on a three-and five-year annualized basis, respectively.
  • This outperformance is achieved with just modestly higher risk: standard deviation for early lifecycle managers is only 1.2% and 0.5% higher than for established managers on a three- and five-year basis, respectively.
  • Early lifecycle managers’ annual returns outperformed established managers’ each year by almost 4%.
  • This occurred across strategies, with the exception of macro strategies funds, where established funds outperformed by just 0.49%.

The report also explains how to use qualitative research to identify the best managers: the data presented in the report represents average returns, and not every new hedge fund will outperform established hedge funds.

Download the report to find out more.

The data behind all of the charts featured in this report is available to access for free. To access the data pack, please contact: julie.canna@50southcapital.ntrs.com 

  • 28/10/2019
  • HF

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