UCITS Hedge Fund Reach Record Highs

New York (HedgeCo.Net) – The first half of 2014 saw a new milestone reached in the alternative UCITS sector with assets under management growing by 15.6% to EU 184.2 billion, demonstrating continued demand for alternative strategies, according to the Alceda Half Yearly UCITS Review. However, Alternative UCITS strategies performed less well during the first half of 2014, advancing just 0.52%, compared to the 5.95% gains seen in 2013.

· AUM in Alternative UCITS reached EUR 184.2 billion growing by almost 16% since Q4 2013
· Multi Asset is the best performing alternative UCITS strategy in H1 2014 with 3.52% gains
· Equity Long Short and Event Driven stratagies assets have risen 66.8% and 88.2% respectively since end of 2013
· Market Neutral strategies are the worst performing to date in 2014, declining 1.12%
· 16 new alternative UCITS strategies launched in H1 2014

Having ended 2013 as the best performing strategy with 12.3% gains, the AH Equity Long Short Index was flat to the end of June 2014, underperforming most long-only equity indices. Despite this, Equity Long Short strategies have seen assets under management rise 66.8% to EU 30.7 billion since the end of last year. Similarly Event Driven strategies have seen assets under management increase 88.2% to EU 3.2 billion over the period, as global M&A volumes increase.

Strong performance in equity and bond markets, both up by 4% in the first half of the year, contributed to Multi Asset strategies being the best performing alternative UCITS strategy year to date, with 3.52% gains in line with its strong performance in 2013.
Managed futures was the only strategy to lose assets, declining -6.7% in H1 2014. However, performance has generally improved and is showing tentative signs of investors re-examining the sector after a challenging couple of years.

The first half of 2014 saw a healthy pipeline of new alternative UCITS launches with 16 new funds across strategies coming to market, but particularly Equity Long Short strategies. The attractiveness of the UCITS brand globally has seen several well-known US hedge funds managers launching UCITS versions of their flagship funds.

The report highlights how an increasing number of funds are acting to limit capacity after seeing strong inflows over the last couple of years. The results show that 6% of funds in the sector are now limiting capacity, which account for 13.6% of total assets under management.

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