(Pension and Investments) The new year is expected to be one of changes that will provide hedge fund managers with opportunity for better performance and new inflows from fresh sources.
But lower revenues might result as institutional investors successfully push fees down and hedge fund managers offer low-cost versions of their funds to attract defined contribution and retail investors.
Hedge fund managers and industry observers didn’t say it would be easy, but they did forecast that hedge fund strategies overall likely will produce better returns this year than they did in 2012 when the HFR Hedge Fund Weighted Composite index produced a 3.08% return year-to-date Nov. 30.
Sources were not willing to predict where hedge fund strategy and major market indexes would end up at the end of December.
“The trees aren’t going to grow to the sky” this year, said Kenneth J. Heinz, given “the incredible global environment” caused by the European sovereign debt and banking crisis, uncertain U.S. politics and unrest in the Middle East. Mr. Heinz is president of Hedge Fund Research Inc., Chicago, the manager of the HFR index family.