The Eurekahedge Report - June 2019

June 2019 | Eurekahedge

The benchmark Eurekahedge Hedge Fund Index was down 0.71% in May, up 4.32% year-to-date. Total assets under management decreased by US$19.2 billion during the month – the sector witnessed performance based decrease of US$18.3 billion while registering net asset outflows of US$0.9 billion. The total size of the industry now stands at US$2.29 trillion.

Asset Flows Update

June 2019 | Eurekahedge

The Eurekahedge Hedge Fund Index slumped 0.71% in May, recording its first monthly decline in 2019 after posting four consecutive positive months. On a year-to-date basis, hedge fund managers are still up 4.32%, supported by the recovery in global equity and bond markets in the first quarter. The return of the US-China trade tension during the month of May weighed on the global economic outlook, resulting in the weak performance of global equities. The MSCI AC World Index plummeted 6.12% in May, as investors were unnerved by the escalating trade disputes. On the other hand, global government bonds saw gains as yields fell on the back of expectations that the Fed will soon cut rates in response to weak economic outlook.

Hedge Fund Performance Commentary

June 2019 | Eurekahedge

The Eurekahedge Hedge Fund Index was down 0.71% in May , following four consecutive positive months since the beginning of the year. Hedge fund managers struggled to generate returns amidst the risk-off environment resulting from the re-escalation of the US-China trade war. The Trump administration’s decision to raise tariffs on Chinese imports prompted the other side to launch retaliatory tariffs, leading to worsening global economic outlook which weighed on global equities during the month. The MSCI ACWI (Local) ended the month down 6.12%. On the other hand, the US 10-year treasury yield dipped to its lowest point in almost two years, as investors expect that the Fed will have to cut interest rates in near future. On a year-to-date basis, hedge fund managers are still up 4.32% as of May 2019.

Eurekahedge Global Hedge Fund Awards 2019

June 2019 | Eurekahedge

The Eurekahedge Global Hedge Fund Awards have been launched with the intent of identifying and celebrating the very best of hedge fund managers in the Americas, Europe, Middle East & Africa (EMEA) and Asia Pacific (APAC) across 45 award categories carefully designed to track key strategic and regional mandates within the global hedge funds industry. In addition to this, we have introduced specialised awards that recognise the performance of new entrants to the industry as well as ‘consistency awards’ for established players that have continued to add value for institutional investors over the years. As a first for the hedge fund industry, the funds are evaluated over the same time period under consideration for all regional awards (Americas, EMEA and APAC) using a consistent methodology that draws on the expertise of our judges who have extensive years of experience allocating institutional money to hedge funds across the globe.

2019 Key Trends in Funds of Hedge Funds

June 2019 | Eurekahedge

Multi-manager funds have recovered from the losses they suffered last year by gaining 5.32% over the first four months of 2019, outperforming their single manager counterparts who returned 5.08% over the same period. In 2018, the fund of hedge funds industry posted its worst annual performance since 2011 as a result of the escalation of the US-China trade war and the Federal Reserve’s aggressive monetary policies throughout the year. Moving into 2019, the easing tension between the US and China trade conflict, combined with the softening stance of the Fed as a response to the weak economic data supported the global equity market over the first few months of the year.

Funds of Hedge Funds Infographic June 2019

June 2019 | Eurekahedge

Eurekahedge’s funds of hedge funds infographic sums up the industry as at June 2019. Find out more about funds of hedge funds assets under management (AUM), asset flows into strategic and regional mandates, strategy returns, fund size and geographic AUM, head office locations and the best and worst performances of the year.

Interview with Sid Klein, Founder & CIO at Global Alternative Investments

June 2019 | Eurekahedge

Mr. Klein is Founder and CIO of Global Alternative Investments (GAI). His 37 years of experience began as a stockbroker working at local and multi-national firms, where he developed his knowledge in the US, Japanese and Chinese equity markets, along with a matching proficiency in precious metals and major currencies, all with an accompanying expertise in derivatives. His comprehensive methodology includes in-depth technical, quantitative, fundamental and valuation analyses. Over a multi-decade period, Sid has identified multiple historic turning points in the major markets and asset classes, often within days. He has appeared in the popular print and TV media since the nineties, while also sharing his commentaries on specialised websites.

Accessing PRC commodity futures from offshore - benefits of the proposed revisions to the QFII and RQFII programmes

June 2019 | Peter Zaman, Katherine Yang, Jeffrey Yang and Matthew R. Yeo - Reed Smith

The changes proposed by the CSRC to the Qualified Foreign Institutional Investors (QFII) and RMB Qualified Foreign Institutional Investors (RQFII) programmes, if fully implemented, will allow qualified offshore investors to invest in PRC commodity futures, in addition to PRC securities and bonds, for the first time. This will give customers of qualified investors access to a new asset class (commodity futures) and will give commodity market participants the ability to access PRC commodity futures markets without the need to establish a local PRC entity. Whether this route gives access to all PRC commodity futures or just those that are already accessible from offshore (i.e., iron ore, crude oil and purified terephthalic acid futures) will depend on the decisions of the respective PRC commodity futures exchanges and the consent of the CSRC.

Cayman Funds Resurgent

June 2019 | Jarrod Farley - Carey Olsen

In the face of economic sluggishness and regulatory change, the Cayman funds industry has marched steadily on – and looks set to prosper for many years to come, says Jarrod Farley of Carey Olsen. The Cayman funds industry has been quietly and steadily continuing its growth trajectory over the past decade, shrugging off the temporary effects of the global financial crisis, despite ongoing sluggishness in the global economy.

New NFA Proficiency Requirements for Hedge Fund Managers

June 2019 | Brian T. Daly and Joshua B. Wright - Schulte Roth & Zabel LLP

The National Futures Association, the self-regulatory organisation for the commodity futures and swaps industry, recently updated its rules to impose “swaps proficiency requirements” on associated persons of NFA members that engage in swaps-related activities. These requirements are likely to be applicable to a significant number of hedge fund advisers (i.e., advisers that are, or are required to be, registered with the Commodity Futures Trading Commission and to be NFA members). While most private equity sponsors are not likely to fall within the scope of any NFA licensing requirement, they should take this opportunity to confirm that the basis for any exemption remains valid.

Revised proposals for new AIFMD marketing rules: how might they impact non-EU funds and their managers?

June 2019 | Nicholas Holman and Jonathan Baird - Hogan Lovells

Back in March 2018 the European Commission announced a proposal for a supplementary Alternative Investment Fund Managers Directive (AIFMD) focussed on the subject of so-called "pre-marketing" of private equity and other alternative investment funds to European professional investors.

Press Release: Nominees of the Global Hedge Fund Awards now available

April 2019 | Eurekahedge

Eurekahedge recently announced the launch of the Global Hedge Fund Awards - the first of its kind industry wide initiative to recognise and award hedge fund managers across the globe. Our elite panel of judges hailing from a mix of public and private pension funds as well as premier funds of hedge funds, will pick winners across Americas, Europe & Middle East, Africa and Asia Pacific. Find out the nominees now.