Hedge Funds Review – Hedge funds finished 2012 in positive territory, according to eVestment. Despite reports of investor dissatisfaction, performance contributed with $116.3 billion increasing overall AUM in 2012.
Hedge fund assets increased almost 6% during 2012 to hit $2.6 trillion as performance added $116.3 billion to the industry total, reports eVestment.
Assets were also boosted by investor inflows of $29 billion, a 1.18% increase for the year. However, hedge funds lost assets as investors withdrew $10.5 billion in the fourth quarter of 2012.
The performance-based gains appear to counter reports claiming poor hedge fund performance has disappointed investors who are redeeming. However, Peter Laurelli, vice-president in the research division at eVestment, says the disappointment is generally not about the absolute performance of hedge funds but the performance relative to equity benchmarks.
“In an environment that was expected to be very difficult and filled with some high-level uncertainties, it makes sense a hedged equity exposure from hedge funds wouldn’t have done as well as 100% beta exposure through an index,” he says.
